After modifications of rare earth and phosphorus, the acidity density and the strength in the pores of zeolite Y (PREUSY) are improved effectively; the surface acidity is suitably reduced and weakened owing to the interaction of rare earth cation and phosphate anion. NH3-TPD analysis showed that the acid distribution of the modified zeolite is more concentrated on the range of intermediate and strong acidity. This kind of modification can direct more hydrocarbons to enter into the pores to be converted and remarkably reduces the possibility of naphtha olefins forming through a surface cracking reaction. In addition, because naphtha olefin reduction does not completely depend on olefin saturation through secondary hydrogen transfer reaction, this kind of reaction mode can decrease the excessive cracking of mediate distillate and can improve the diesel oil yield (LCO) effectively. Some reaction pathways were proposed. (C) 2004 Elsevier B.V. All rights reserved.