Heavy oil is a promising substitute to conventional light oil due to its abundant reserves, but its high viscosity restricts mobility and results in low recovery rate. To enhance heavy oil recovery, thermal method with metal-ligand compounds was developed, which reduced oil viscosity permanently and upgraded oil in situ. However, the mechanism for viscosity reduction using metal-ligand compounds remains unknown. This paper provides experimental observations that shed light on this mechanism. We used thermal treatment on Peace River heavy oil using iron (III) para-toluenesulfonate hexahydrate (Fe(pts)3·6H2O) at 280 °C for 36 h. Thermal-only treatment changed the oil viscosity by -38.5%, while Fe(pts)3·6H2O changed by -58.5% (or nonthermal viscosity change of -20%). Gas chromatography/mass spectrometry (GC-MS) identified the formation of 4-methylbenzenethiol in oil after "thermal + Fe(pts)3·6H2O" treatment. Post-reaction analysis shown that 4-methylbenzenethiol acted as disaggregator to aid in asphaltene disaggregation. We also suggest that the metal-complex can catalytically crack certain chemical bonds in asphaltene components, contributing to further nonthermal viscosity change. This paper seeks to better understand the mechanisms of oil viscosity reduction using metal-ligand compounds. By identifying and understanding how they work, we provide new insights in developing the next generation of metal-ligand compounds.