LIME water into MILKY.Carbondioxide (CO2) turns lime water milky, due to the formation of CaCO3 (calcium carbonate).The chemical reaction is as follows: CA(OH)2 + CO2 ⇒ CaCO3 + H2O.Lime Water is formed when Calcium Oxide (CaO) is mixed with water it forms lime water or Calcium Hydroxide (Ca(OH)2).