A proof-of-concept study for a new shale oil upgrading and refining process was undertaken. This project is aimed at reducing upgrading costs, thereby malting shale oil development more feasible for commercialization. Raw shale oil was topped to remove the most volatile components. The topped shale oil was distilled into three narrow boiling cuts, representing of 175--275{degrees}C, 275--365{degrees}C, and 365--455{degrees}C, and a residue portion (>455{degrees}C). The distillate cuts were used to study molecular weight effects, and the residue was used to test the performance of hydropyrolysis. Hydropyrolysis converts the heavy residue into lower boiling point materials which can be more easily hydrotreated. In the experiment to test molecular weight effects, it was found that geometric hindrance accounts for the inhibition effect. Diffusion limitation and inhibition by competitive adsorption are not strong effects. These results imply that there is no process substitute for the requirement of molecular weight reduction. In the experiment to test the performance of hydropyrolysis, average molecular weight is reduced from 495 to 359 at moderate severities. In HDN of the hydropyrolized residue, however, high process severities are still required to remove nitrogen to the level of refinery-acceptable-feed (< 0.15 wt %). Based on experimental data, the product slate is 1.9 wt % gas, 13.1 wt % gasoline, 27.3 wt % kerosene, 55.6 wt % total gas oil, 1.3 wt % vacuum residue, and 0.8 wt % coke with 1376 scf/bbl total hydrogen consumption. The removal of sulfur is 96%, and that of nitrogen is 84%. The concentration of sulfur in the final product is 0.038 wt %, and that of nitrogen in final product is 0.26%. The conversion of heavy residue to atmospheric distillate is 47%. However, the remaining residue is partially upgraded as a refinery feed.