A process for upgrading a heavy hydrocarbonaceous oil is provided in which the heavy oil is hydrorefined in the presence of a hydrorefining catalyst at conditions to convert a portion of the heavy constituents of the oil, followed by cracking the hydrorefined oil in the presence of the hydrogen donor diluent. The hydrorefining and cracking stages are conducted at a relatively low hydrogen partial pressure while obtaining a high level of conversion of the heavy constituents of the oil.