A hydroprocessing method and system involves introducing heavy oil and well-dispersed metal sulfide catalyst particles, or a catalyst precursor capable of forming the well-dispersed metal sulfide catalyst particles in situ within the heavy oil, into a hydroprocessing reactor. The well-dispersed or in situ metal sulfide catalyst particles are formed by 1) premixing a catalyst precursor with a hydrocarbon diluent to form a precursor mixture, 2) mixing the precursor mixture with heavy oil to form a conditioned feedstock, and 3) heating the conditioned feedstock to decompose the catalyst precursor and cause or allow metal from the precursor to react with sulfur in the heavy oil to form the well-dispersed or in situ metal sulfide catalyst particles. The well-dispersed or in situ metal sulfide catalyst particles catalyze beneficial upgrading reactions between the heavy oil and hydrogen and eliminates or reduces formation of coke precursors and sediment.