Cyclic steam stimulation is an effective thermal recovery method for heavy oil recovery. The key potential mechanism is the growth of the steam chamber after steam injection. Taking the LD5X heavy oil reservoir as an example, besides the interlayer developed in this area, the top water and bottom water distribute above and below the interlayer. These factors may have adverse effects on the development of the steam chamber, thus affecting the final heavy oil exploitation. In this work, our goal is to study the effects of interlayer permeability and well–interlayer distance on CSS performance (in the presence of top and bottom water). We developed a high-temperature-resistant interlayer. Based on the simulated interlayer, the field scale model was converted into a laboratory element model through the similarity criterion. In order to quantitatively evaluate the performance of steam stimulation, a thermal detector was used to measure the dynamic growth of the steam chamber and record the production data. The experimental results show that the self-made interlayer has high-temperature resistance, adjustable permeability, and little difference between the physical parameters and the target interlayer. During the cyclic steam stimulation process, the steam chamber presents two different stages in the presence of the top water area, namely the normal production stage and the top water discharge stage. The bottom water has little effect on the growth of the steam chamber. The small interlayer permeability, the increase in horizontal well–interlayer distance, and the existence of the interlayer will delay the top water leakage during steam stimulation. This study has reference significance for us to develop heavy oil resources with a top water barrier when implementing steam stimulation technology.