Steel slag is a byproduct of iron and steel production by the metallurgical industries. Annually, 21 million tons of steel slags are produced in the United States, and most of this slag is landfilled. Landfilling represents significant economic loss and uses valuable land space. Although steel slag has great potential for use in highway applications, especially as a granular highway base or subbase material, it has not been used extensively because of its high swelling potential and alkalinity. Swelling potential deteriorates the structural stability of highways, and high alkalinity poses an environmental challenge. This study seeks a methodology that promotes the use of steel slags in highway base and subbase layers by minimizing these two main disadvantages. Two treatment methods were used. In the first method, steel slag material was coated with bituminous material. lathe second method, the slag was mixed with water treatment residuals at various percentages by weight. The mixtures prepared in this study were subjected to accelerated swelling tests and batch water leach tests. Results of the swelling tests indicated that the addition of both water treatment residuals and bituminous material into steel slag decreased the swelling rate significantly. Furthermore, bituminous-coated mixtures did not exhibit any swelling. These two methods also decreased the effluent pH of steel slag from 12.3 to 11.65 (bitumen-coated slag) and 9.8 (slag mixed with water treatment residuals). The batch test results did not satisfy the pH 8.5 limit regulated by the Maryland Department of Environment for placement of industrial byproducts in highways.