A hydroprocessing system involves introducing heavy oil and in situ formed metal sulfide catalyst particles, or a catalyst precursor capable of forming metal sulfide catalyst particles in situ within the heavy oil, into a hydroprocessing reactor. The metal sulfide catalyst particles are formed in situ 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 metal sulfide catalyst particles in situ in the heavy oil. The in situ formed metal sulfide catalyst particles catalyze beneficial upgrading reactions between the heavy oil and hydrogen and eliminates or reduces formation of coke precursors and sediment.