The oxy-thermal carbide furnace chemical reaction equilibrium system is analyzed in this study with a thermodynamic model. Previous studies have shown that the formation temperature and reaction process mechanism of calcium carbide (CaC2) are controversial in the presence of Ca vapor. Therefore, this study investigates the oxy-thermal carbide furnace chemical reaction equilibrium system in the presence of Ca vapor, and the Delta G-T diagram is spontaneously utilized to predict the formation temperature and the order of reaction in CaC2. Then the four-stage reaction mechanism is proposed. CaC2 yield and selectivity at various operating conditions are analyzed by performing a detailed investigation on the chemical reaction equilibrium limitation effect of the reaction system at different temperatures, pressures, and C addition. The shifting mechanism of chemical reaction equilibrium and the optimum operation conditions for the carbide manufacturing are obtained by comparing CaC2 yield and selectivity at different operating conditions. Results show that CaC2 yield and selectivity are relatively high at 2473.15 K and 0.1 MPa, respectively, at feed amounts of 10.7 mol C, 1.22 mol CaO, and 2.85 mol O-2.