Electric-arc-furnace steelmaking uses scrap iron and steel as raw materials. However, scrap iron and steel have complicated sources and contain heavy metal components, which may be released into the environment after long-term wear and tear. Oxidizing slag is a by-product of the electric-arc-furnace steelmaking process and approximately 1.2 million metric tons of oxidizing slag are produced every year in Taiwan. Substituting oxidizing slag in place of fine aggregates in dense-graded asphalt concrete, the main aims of this study are to evaluate the water resistance and asphalt film thickness, to explore the performance of oxidizing slag as paving material, to examine current regulations for using the dissolved amount and total amount of heavy metals, and to assess the environmental compatibility. The results show that, owing to the complicated sources of oxidizing slag, the basic properties should be checked for each batch and trial mixing should be carried out before producing dense-graded asphalt concrete in order to confirm the mixing time to achieve uniformity. The results also show that using oxidizing slag in dense-graded asphalt concrete yields good performance. In addition, the results of the toxicity characteristic leaching procedure (TCLP) meet the regulation requirements. However, the amounts of heavy metal elements obtained through microwave-assisted aqua-regia digestion exceed the monitoring standards for food crops. Considering environmental compatibility, it is recommended that controlling the total amount of heavy metals in oxidizing slag should be included in regulatory requirements.