Efficient conversion of polynuclear aromatic hydrocarbons (PAHs) into liquid fuels is crucial for the hydrocracking processes of heavy oils. In this work, we found that the hydrocracking of anthracene catalyzed by NiFe/HZSM-5 could produce ethyl biphenyl (EB), which realizes high efficiency of hydrocracking of anthracene analogous to its central-ring hydrocracking. More interestingly, addition of water could increase the yield of EB significantly, and the yield of EB could be as high as 34 %. A pathway for hydrocracking of anthracene to EB and the mechanism for water to enhance the yield of EB are proposed on the basis of control experiments. Furthermore, our work demonstrated that water could also increase the liquid yields and reduce the gaseous yields in the hydrocracking of the Daqing residue oil in the same reaction system. This work not only provides new chemical knowledge on hydrocracking of PAHs, but also provides very important information for improving the hydrocracking processes of heavy oils to obtain more liquid fuels with less hydrogen consumption.