A process for recovering oil from tar sands by subjecting the tar sands to aqueous extraction to produce a bitumen-rich layer containing bitumen, water and solids and a bitumen-lean layer containing relatively less bitumen and relatively more water and solids. The solids present in the bitumen-lean layer contain a substantial portion of finely divided clay having adhered organic matter. The clay solids are retained with the bitumen from the bitumen-lean layer and the bitumen-clay mixture is pyrolyzed. Pyrolysis of the bitumen-lean layer containing clay having adhered organic matter reduces the volume of aqueous tailings which would otherwise be produced and also results in increased hydrocarbon yields.