The present invention relates to a continuous in-situ process for the removal from heavy oils, of organically bound sulfur in the form of mercaptans, sulfides and thiophenes, heteroatoms selected from the group consisting of nitrogen and oxygen and metals selected from the group consisting of nickel, vanadium and iron, comprising the steps of (a) contacting a heavy oil with aqueous sodium hydroxide at a temperature of about 380.degree. to about 450.degree. C. for a time sufficient to form sodium sulfide; (b) contacting said sodium sulfide of step (a) with water and a transition metal for a time and at a temperature sufficient to form transition metal sulfide, sodium hydroxide, hydrogen and impurities; and (c) recirculating said sodium hydroxide from step (b) to step (a) and removing said transition metal sulfide and said impurities, wherein said impurities are iron, vanadium and nickel. Optionally, molecular hydrogen may be added in the first step. The present invention is useful in removing organically bound sulfur that has been recognized to be difficult to remove, such as thiophenes. Beneficially, the process also removes other heteroatoms (nitrogen and oxygen) and metals (vanadium, iron, nickel) and reduces asphaltene content (n-heptane insolubles), micro concarbon residue, coke, 975.degree. F. fractions, TGA fixed carbon, average molecular weight, density and viscosity.