The manufacture and setting of lime is chemically defined as three separate processes:

• Burning or calcining of calcium carbonate by which carbon dioxide gas is driven off at temperatures of about 800 degrees centigrade to produce lumplime or calcium oxide.
• Slaking or hydration of calcium hydroxide by exothermic reaction with water to produce lime putty or calcium hydroxide.
• Setting or carbonation of calcium hydroxide by slow reaction with carbon dioxide in the air to produce calcium carbonate.

This series of reactions is called the lime cycle because this cycle of burning, slaking and carbonation starts and ends with calcium carbonate.

The chemistry of hydraulic lime is more complicated. Along with the lime cycle processes described above, complex reactive clay minerals are formed during the burning process which when wetted in the presence of calcium hydroxide react to form a harder setting material.