The cracking activity of a fluid catalytic cracking (FCC) catalyst containing novel zeolite Y nanoparticles fabricated using mesoporous silica (average particle size of 150 nm) was examined and compared with the performance of other catalysts. The activity experiments were carried out in a fluidized bench-scale batch riser simulator reactor. The bulky probing compound of 1,3,5-triisopropylbenzene (TIPB) was cracked to lighter compounds over a catalyst containing 25% of the developed zeolite. The synthesized sodium-type zeolite nanoparticles were subjected to two cycles of ion-exchange treatment using ammonium sulfate and lanthanum chloride and then to calcination. To investigate the effects of particle size on the activity, three additional catalysts were prepared with the mean particle size of the supported zeolites ranging from 450 to 1800 nm. The preparation of the FCC catalysts was conducted by mixing the highly aqueous dispersed zeolite Y nanoparticles with colloidal silica-alumina as a matrix and silica sol as a binder. The results of the catalytic cracking of TIPB demonstrated the significant effect of the size reduction of the synthesized zeolite Y nanoparticles on the catalytic performance of the catalyst. The FCC catalyst that contained zeolite Y nanoparticles (150 nm) showed superior conversion and selectivity percentages for the main products. The results of this study have a direct implication on the preparation of colloidal catalysts containing zeolite Y nanoparticles, which form stable emulsion with petroleum products. These emulsions can be utilized for slurry and ebullated bed reactors in heavy oil upgrading applications.