Using a high-temperature and high-pressure ultrasonic reactor, the hydrothermal cracking reaction of vacuum residue of Huizhou Refinery. The gas product composition, liquid product composition, reaction coke SEM morphology, and element analysis were investigated to discuss the mechanism of hydrothermal cracking reaction under the effect of ultrasonic wave. The results show that there is no significant difference in the yield of gas products in hydrothermal cracking reaction mechanism of the residue under the effect of ultrasonic wave and the production rate of light oil has been increased slightly while that of coke has been slightly reduced. The angularity of the coke particles is relatively smooth and the pore structure appears, indicating that under the effect of ultrasonic wave, the hydrothermal cracking reaction of residual oil is mainly based on the radical thermal reaction mechanism and the cavatition of ultrasonic wave can promote the residuum to have cracking reaction so that the production rate of light oil has been slightly increased. The mechanical effect of ultrasonic wave causes the raw coke precursor suspended in the residue to oscillate violently, so as to prevent its polymerization, thus having reduced coking, the large increase of Ni in the coke indicates that the catalyst provides a coking center for coking.