Specimens from a Hi‐Nicalon Type S/BN/SiC (MI) ceramic matrix composite with multiple machined holes were subjected to a furnace dwell and then tensile tested. The furnace temperature range was 500–900°C, and the atmosphere was pure steam to approximate the temperature and sea level partial pressure of water vapor in the cooling air going through turbomachinery cooling holes. Exposure of control specimens was done in laboratory air at the same temperatures. Tensile results along with microscopy and spectroscopy showed significant strength degradation in some conditions due primarily to oxidation of the boron nitride fiber coating, with coating volatilization at lower temperatures and probable fiber‐to‐matrix bonding and imposed fiber stresses at higher temperatures. The greatest strength degradation occurred in the 500–600°C steam range. The fiber coating oxidation/volatilization was especially evident near the holes and was exacerbated in the lower temperature tests by porosity networks that were open to the atmosphere at fiber tow ends at the specimen edges and along the inner walls of the holes.