This is the most widely used type of lime. It comes either in a powdered form, such as Type N, NA, S, or SA, or as a paste known as Lime Putty. While Hydrated Lime boasts excellent physical and aesthetic properties, it has significant limitations in construction. It sets only through carbonation (the re-absorption of CO2), which restricts its use to thin layers. It is impractical for use in scratch or brown coats in plaster but can be highly effective as a finish coat, often requiring blending.

Hydraulic Lime, although chemically similar to Hydrated Lime, has the advantage of setting initially with water, similar to cement, and then completing its set by absorbing CO2. This property simplifies its application, although it still requires basic care, such as controlling the amount of water used, ensuring good sand quality, and proper tarping. The labor costs for applying Hydraulic Lime are comparable to those for normal stucco installations. For example, the hydraulicity of St. Astier lime is a result of the natural raw materials used.

Hydraulic properties in Hydrated Lime can also be achieved by adding cement, pozzolans, or other materials. However, introducing foreign chemical elements can have immediate or long-term negative effects, so it is advisable for users to avoid such hybrid products.