Recently, increased attention has been exerted on the utilization of cheaper hydrocarbons fuel such as Vacuum Residue (VR). As a fundamental investigation for VR utilization, VR combustion tests were carried out in a test furnace with a fuel feed rate of 20 kg/h. As compared with heavy oil, VR used in this work is much more viscous and contains high percentages of sulfur, carbon residue and heavy metals. Successful fuel transportation and atomization has been achieved with the indirect heating of fuel by a thermia oil. The measured distributions of temperature, major species concentrations and solid samples along with the furnace revealed that the main reaction zone remains within about 1 m from the burner tip and the characteristics of VR flame are dependent on the ratio of fuel/air feeding rate. VR carbonaceous particles collected along with the furnace showed that their complete conversion would be a very essential factor for the utilization of VR as a fuel. Several issues for applying it to utility boilers have been investigated in line with the present results, and some suggestions have been made.