To determine the effect of CaO-treated Pensacola bahiagrass (Paspalum notatum) hay on intake, ruminal fermentation parameters, and apparent total-tract digestibility of nutrients, nine ruminally cannulated Angus-crossbred steers were used in a triplicated 3 × 3 Latin square design. Steers had ad libitum access to either 1) untreated dry hay (DH; n = 8); 2) hay at 50% DM treated with 8.9% CaCO3 (dry matter [DM] basis; CC; n = 9); or 3) hay at 50% DM treated with 5% CaO (DM basis; CO; n = 8). Water was added to reach 50% DM in the CC and CO diets. Ruminal fluid and blood samples were collected every 3 h for 24 h. Ruminal fluid was analyzed for pH, volatile fatty acids (VFA), and ammonia-nitrogen (NH3-N). Blood was analyzed for plasma urea nitrogen (PUN). Hay and fecal samples were collected for 4 d, four times daily for hay and twice daily for feces, to determine apparent total-tract digestibility of nutrients. The hay provided to steers during the digestibility period was analyzed for in vitro organic matter digestibility (IVOMD) for 48 h. Data were analyzed as repeated measures for blood and ruminal fermentation parameters. Total DM intake was not affected (P ≥ 0.674) by treatment. A treatment effect (P > 0.001) was observed for average ruminal pH, where steers consuming CO had the greatest pH (P > 0.001). Ruminal concentration of NH3-N tended (P = 0.059) to be reduced in steers consuming CO. There was a treatment × time interaction (P = 0.023) on concentrations of PUN, where at 3 h DH and CO were lesser than CC (P ≤ 0.050) and at 21 h DH was lesser than CC (P = 0.020). Total VFA, acetate, propionate, butyrate, branched-chain VFA, and valerate concentrations were affected by treatment (P ≤ 0.035), where a reduction (P ≤ 0.034) occurred in steers consuming CO. No treatment differences were observed for total-tract digestibility of DM (P = 0.186), organic matter (P = 0.169), or crude protein (P = 0.152); however, steers consuming DH had greater neutral detergent fiber (P = 0.038) than CC and tended to be greater than CO (P = 0.082). The CO hay had greater (P = 0.005) IVOMD compared with DH and tended (P = 0.100) to be greater than CC. Bahiagrass hay treated with CaO may reduce ruminal fermentation, as indicated by decreased total VFA concentration without altering DM intake. The addition of CaO did not improve the digestibility of bahiagrass hay in vivo; however, in vitro results are contradictory and warrant further elucidation.