The present study investigated the microstructural evolution and carbonation behavior of lime-slag binary binders. Samples having various lime/slag ratios were fabricated and characterized with the aid of X-ray diffractometry, thermogravimetry analyses, 29Si nuclear magnetic resonance spectroscopy, mercury intrusion porosimetry, autogenous and carbonation shrinkage measurements, carbonation depth measurements, and compressive strength development tests. These test results revealed that the carbonation of lime-slag binary binders yielded stable carbonates and subsequently refinement of the pore size and a corresponding strength modification. In addition, the lime-slag binary binders exhibited much less autogenous shrinkage movement than typical alkali-activated slag made with a combination of sodium hydroxide and water glass due to its low reaction rate and volumetric expansion accompanied by the hydration of lime. On the other hand, the phenomenon of the carbonation shrinkage of lime-slag binary binders resembles that of Portland cement due to the presence of portlandite, which served as a carbonation buffer.