Cyclic steam injection into representative, low-permeability, hydraulically fractured, diatomaceous, heavy-oil formations is investigated using reservoir simulation. Previous laboratory research has shown that diatomite reservoir rocks exhibit temperature-dependent wettability. Water-oil and liquid-gas relative permeability are varied here and a reservoir simulator used to evaluate the effects on oil recovery. Sensitivity studies are carried out for relative permeability curves compiled from literature for diatomaceous reservoirs. The various parameters included in the analysis are relative permeability end points and viscosity variations with increasing temperature, rock and fluid properties (such as thermal conductivity and heat capacity), injected steam temperature, pressure, and quality, bottomhole pressure for injectors and producers. The results indicate that the liquid-gas relative permeability affects process performance most sensitively because gas displacement determines the shape of the heated zone during cyclic steam injection. For the recovery of heavy oil from diatomaceous formations, realistic evolution of the liquid-gas relative permeability at steam temperatures increases the oil recovery in the range of 15 to 60% of the OOIP in comparison to cases with no evolution of wettability with temperature. Very short two week cycles (inject-soak-produce) make more oil and show greater sensitivity to the evolution of wettability with temperature.