The application of steel slag as supplementary cementitious materials is limited by its poor hydration activity and volume stability, while steel slag shows excellent carbonation activity. In this paper, the carbonation degree of steel slag was controlled by adjusting the CO2 concentration and carbonation time. The effect of carbonation on the microstructure and CO2 uptake of steel slag was analyzed, and the volume stability and hydration activity of carbonated steel slag used as supplementary cementitious materials were evaluated. The results show that the 3, 28 d compressive strength of mortar containing 30% (mass fraction) steel slag reduce by 43.2% and 30.0%, respectively, compared to the mortar without steel slag. And paste specimen collapses due to expansion after autoclaving experiment. The CO2 uptake of steel slag is significantly affected by the concentration of CO2. The CO2 uptake of steel slag arrives at 3.67% after carbonation for 3 min at high concentration (volume fraction is 99.9%) of CO2. The volume stability of steel slag is positively correlated with the degree of carbonation, while over carbonation treatment reduces the hydration activity. The 3 d compressive strength of mortar containing 30% (mass fraction) steel slag carbonated for 3, 10 min increases by 28.3% and 15.8%, respectively.