We previously described a MgO-based binder for treating fine sediment and simultaneously store CO2. Here, we describe a study of the physical/mechanical characteristics and carbonation reactions of the MgO-based binder used to solidify/stabilize fine sediment in atmospheres containing different CO2 concentrations. Carbonation of the sediment treated with the MgO-based binder at the atmospheric CO2 concentration markedly improved the compressive strength of the product. The compressive strength was 4.78MPa after 365days of curing, 1.3 times higher than the compressive strength of sediment treated with portland cement. This improvement was caused by the formation of carbonation products, such as hydromagnesite, nesquehonite, and lansfordite, and the constant high pH (~ 12) of the specimen, which favored the growth of hydration products such as calcium silicate hydrates and portlandite. Very low compressive strengths were found when 50 and 100% CO2 atmospheres were used because of excessive formation of carbonation products, which occupied 78% of the specimen depth. Abundant carbonation products increased the specimen volume and decreased the pH to 10.2, slowing the growth of hydration products. The absence of brucite in specimens produced in a 100% CO2 atmosphere indicated that MgO carbonation is favored over hydration at high CO2 concentrations.