Steam-assisted gravity drainage (SAGD) is one efficient and mature technology for recovering heavy oil and bitumen resources. The key underlying mechanism is the growth of the steam chamber after injecting steam. However, due to the complex geological environment, the thief zones exist and have a prejudicial effect on the development of the steam chamber, thus impacting the ultimate heavy-oil recovery. In this work, our objective is to investigate the effect of a top-water thief zone (i.e., water zone overlies the oil sand) on SAGD performance and further to understand the crucial mechanisms that control the heat loss during steam injection. A large-scale three-dimensional experimental apparatus is used to carry out the SAGD process with a top aquifer. Based on the similarity criterion, the field-scale model is transformed into a laboratory elemental model. To evaluate the SAGD performance quantitatively, the dynamic growth of the steam chamber is measured using the thermal detectors and the production data is recorded. The results show that the steam chamber exhibits three distinguished stages, that is, upward spread, lateral extension, and downward development in the presence of top-water zone. The bottom-water zone has less impact on the steam-chamber growth. The existence of a confined top-water zone, however, significantly affects SAGD performance, especially the lateral expansion of the steam chamber. The lateral propagation of the steam front is hindered by the top thief zone due to the heat exchange with the top water. Once the steam chamber reaches the boundary, the accumulation of energy in the water thief zone, in turn, can reduce the remaining oil saturation along the topwater-oil interface. This study provides us some key insights into the development of heavy oil resources with top thief zones when implementing SAGD technology.