Rate equation theory for CaO carbonation reaction was developed to replace the assumption of critical product layer thickness with a complete calculation of the rates of CaCO3 nucleation and growth. The model includes rate expressions for the island size distribution function with time evolution, and the surface reaction, surface diffusion, grain boundary and lattice diffusion, and Ostwald ripening were considered in this theory to describe CaCO3 product islands growing on the CaO surface. The macroscopic behavior of a gas-solid reaction can be calculated with the island size distribution. The carbonation reaction of CaO with CO2 including both early islands growth stage and later product layer diffusion stage was calculated with the developed theory and was validated with experimental data, and the relative importance of some elementary steps was discussed. This rate equation theory provides a link between the macroscopic behavior of a gas-solid reaction with the microscopic mechanisms from the molecular level.