Choosing the best reaction condition of Chengbei heavy oil in sub-critical water upgrading simulation experiment，analyzing hydrocarbon composition and structure of heavy oil upgrading，and comparing viscosity effect with three upgrading reaction，we got results that water in sub-critical condition had the nature of near-critical fluid，and the effect of solvent and catalytic for hydrogen. When oil-water mass ratio was 8∶2，reaction temperature was 260℃，pressure was 6 MPa and time was 24h，the viscosity reduction rate was 21.4%，the content of asphalt decreased 56.46%. The infra-red spectrum of crude and upgrading heavy oil presented obviously cleavage of C—S bond. Reducing the pressure to 3 MPa and in non-critical condition for general upgrading of heavy oil，the viscosity of heavy oil decreased 7.98%. Adding 0.1% catalyst，the viscosity of heavy oil decreased 51.27% by near-critical water catalytic upgrading. Three upgrading methods were arranged according to the effect of viscosity reduction in following order: sub-critical water catalytic upgrading>sub-critical water upgrading>general upgrading.