Upgrading of atmospheric residue (AR) with tetralin whose AR/tetralin volume ratios were 1/1, 2/1, 3/1 was investigated in a tube reactor with or without a catalyst at temperature between 400 and 500°C and at liquid hour space velocity (LHSV) of 1hr-1 under 1000psig. The results show that the properties of the cracked oils have been improved as indicated by the increase in API gravity and decreases in average molecular weight, sulfur content, and Conradson carbon content. The higher liquid yields and better qualities of cracked oils obtained catalytically compared with those noncatalytically indicate that Ni-Mo hydrocracking catalyst plays a role of transferring hydrogen from tetralin to the cracked oils. In both cases, 450°C was observed to be optimal of cracked oils in terms of yield and quality.