This paper investigates the role of compositional processes during the steamflooding of a typical California heavy oil. In the past, compositional effects have usually been ignored in heavy oil steamflood thermal simulation studies. Results indicate that the coupled, nonlinear steam distillation/in-situ solvent generation process is capable of significantly reducing oil saturations upstream of the advancing condensation zone, under conditions representative of typical steamfloods. Very fine grid 1 -D and 2-D mechanistic simulation models are required to accurately resolve the relevant physics. An appropriate pseudo-component equation of state, tuned to laboratory data is also essential. A procedure for optimizing the steam distillation mechanism in mature steamfloods using a horizontal well is presented.