Abstract Heavy oils have high viscosity, density, and Conradson carbon residue and high contents of sulfur, nitrogen, oxygen, nickel, and vanadium, as well as asphaltenes, which can cause problems for producers, leading to catalyst deactivation and fouling and plugging of tubing, pipes, valves, and reactor flow lines. Heavy oil upgrading can be classified into carbon rejection and hydrogen addition processes, mainly including four technologies: (1) the fluid catalytic cracking (FCC) process, which catalytically converts heavy oil into light fractions, like liquid petroleum gas, naphtha, and light cycle oil; (2) the hydro-processing process, which catalytically converts heavy oil to high-quality feedstock for FCC and hydrocracking processes under the hydrogen atmosphere without coke formation; (3) the coking process, which thermally converts heavy oil into light liquid fractions and large amounts of coke; and (4) the solvent deasphalting process, which fractionates distillation resid to provide feedstock for residue FCC, such as the residue oil solvent extraction. This paper reviews the progress on basic research of heavy oil chemistry and processing technology developments in China. Heavy oils were comprehensively characterized by the supercritical fluid extraction and fractionation technology and high-resolution mass spectrometry. The FCC process for maximizing iso-paraffin, new residue hydroprocessing technologies, progress in coking process, and a new process – the Supercritical Fluid Selective Extraction Asphaltene Technology – were discussed. As an emerging and promising research area, molecular management techniques were prospected, as well as a new concept of coupling the SELEX-Asp with the conventional heavy oil upgrading processes.