Accelerated carbonation was employed to pretreat steel slag supplementary cementitious materials (SCMs) to improve its hydration reactivity and volume stability. The microstructures of carbonated steel slag SCMs and their impact on the hydration, soundness and compressive strengths of cement materials were investigated. Results indicated that nano-CaCO3 and amorphous SiO2 gel were the main carbonation products of steel slag, which constructed a porous microstructure, leading to an obvious increase in specific surface area by 77.11%. The nano-CaCO3 and amorphous SiO2 were involved in cement hydration to form monocarboaluminate and C-S-H respectively, which increased the hydration degree, enhanced the interface between the steel slag and hydrated cement matrix. For instance, compressive strength of cement paste mixed with 30 wt% carbonated steel slag was increased by 9.7 % compared with that of the paste incorporating noncarbonated steel slag. The autoclave expansion of cement paste containing 30 wt% carbonated steel slag was 0.17% whereas that of the paste containing uncarbonated steel slag was disintegrated as a result of excessive expansion. This study provides a novel way to utilize the steel slag to prepare high quality SCMs for being used as a replacement of cement.