A hydrocracking study of Karamay residue using a batch reactor in the presence of dispersed Ni catalysts with different sulfurization methods is reported. Using two different courses of dispersion and sulfurization, the water-solubility Ni catalyst is dispersed in heavy oil and the dispersed catalyst is separated and characterized. Results showed that the water-solubility salts turn into NiS and NiS2 at the sulfrization temperature of 300 degrees C, regardless whether the emulsion breaking was achieved by multiple stages or a single stage after dispersion, and while the sulfurization temperature is at 300 degrees C and breaking the emulsion is by one stage, the better crystal of nikel pyrite is formed and the average particle size of the crystal is smaller than breaking the emulsion by multiple stages. The colloidal sol catalytic system of nikel pyrite is also synthesized in the experiment, and the Sol of nikel pyrite can be highly homodisperse in oil and can restrain coke forming effectively.