Lime water is a solution of calcium hydroxide (Ca(OH)₂). When CO₂ gas is passed through lime water, the following reaction occurs.

The solution of lime water turns milky due to the formation of calcium carbonate, which is a white precipitate insoluble in water.

If CO₂ gas is passed in excess amounts, then the above reaction occurs further.

The product formed is calcium hydrogen carbonate, which is soluble in water. Hence the milky solution becomes a clear solution.