Abstract: The present invention is a new and simple method of decomposing ammonium tetrathiomolybdate (ATTM) in an organic solvent with added water under H2 pressure. Model compound reactions of 4-(1-naphthylmethyl)bibenzyl (NMBB) were carried out at 350-425° C. under H2 pressure in order to examine the activity of the Mo sulfide catalysts generated from ATTM with and without added water for C—C bond cleavage and hydrogenation of aromatic ring. The Mo sulfide catalysts generated from ATTM with added water were much more effective for C—C bond cleavage and hydrogenation of aromatic moieties at 350-425° C. than those from ATTM alone. Two-step tests revealed that the addition of water is effective for generating highly active Mo sulfide catalyst from ATTM, but water itself does not promote catalytic conversion. Removal of water after the decomposition of ATTM with added water at 350-400° C. under H2 pressure by hot purging gives highly active Mo sulfide catalyst.