A process for simultaneously cracking a heavy hydrocarbons to form light oil and producing hydrogen is described, which comprises (1) a first step wherein steam and heavy hydrocarbons are simultaneously contacted with a catalyst in a reduced state, containing iron in the form of iron oxide, to produce hydrogen, cracked gases and cracked light oils, to convert the reduced-state catalyst into an oxidized-state catalyst, and to deposit coke on the catalyst, (2) a second step wherein the oxidized-state catalyst with coke deposited thereon is contacted with an oxygen-containing gas to partially combust the coke on the catalyst, to convert the oxidized-state catalyst into a reduced-state catalyst, and to fix a sulfur compound contained in the coke as iron sulfide with a part of the reduced-state catalyst; and (3) a third step wherein catalyst obtained from the second step, the major portion of the catalyst being recycled between the first step and second step, is contacted with an oxygen-containing gas at a temperature of from 600.degree. to 1,000.degree. C. to effect roasting and gasification of iron sulfide in the catalyst.