The study used electric arc furnace oxidizing slag (EAFOS) to substitute natural fine aggregates. However, EAFOS replacement may cause volumetric instability. Therefore, a cement, fly ash, or slag layer was coated with EAFOS as a precoated technique. Then, the effect of EAFOS on engineering properties was investigated, and the optimum amount of EAFOS was identified. The amount of coated binders was set at 20%, 25%, 30%, 35%, and 40% of the weight of EAFOS, and the water-to-binder ratio (w/b) of the coated binders was fixed at 0.50 to 0.20. The proportion of EAFOS replacing fine aggregates was 10%, 20%, 30%, 40%, and 50%, and the w/b of the mortar was fixed at 0.55. The results showed that the proportion of precoated binder was 30% of the EAFOS and the w/b was 0.30. Curing time was up to 28 days, and slag was the appropriate precoated binder. Maximum compressive strengths of mortars made with precoated EAFOS were 42.94 and 56.96 MPa at 7 and 28 days (40% replacement for fine aggregates). The maximum compressive strengths of specimens without coated EAFOS were 36.67 and 47.55 MPa at 7 and 28 days (the identical replacement). The drying shrinkage of 40% precoated slag specimens was 0.054% at 7 days and 0.074% at 28 days. The appearance of the specimens did not reveal any abnormality after 28 days of immersion in water at 70 °C. The precoated technique adopted in this study can be used as a stabilization procedure for replacing natural fine aggregates with EAFOS