The conversion of Canadian oil sand bitumen was remarkably enhanced by oxidation pretreatment during hydro-thermal cracking. The reaction mechanism was discussed from elemental analysis, NMR results as well as reaction behavior, suggesting that the peroxide or its free radical might be formed by oxidation of heavy oils. Hydrogen in hydrocarbon might be easily abstracted via formation and successive decomposition of peroxides and the chain reactions were readily initiated. Therefore, the conversion was obviously increased even at lower temperature. When the feed was oxidized by air, the reaction temperature could be lowered about 20 K to obtain the same conversion level to that without oxidation pretreatment. As a result, higher conversion, higher yield of middle distillate, as well as lower selectivity of gas and coke, were realized. (c) 2005 Elsevier Ltd. All rights reserved.