It's a mix. The library is C, pure and simple. But we use OCaml to generate a lot of that C - which I think is a very under-used but powerful technique giving you the best of both worlds. We also use OCaml to generate programming language bindings to the C API, so that when a new API is added you simply have to recompile and the API is available in every supported language (about a dozen so far).

However the main use of OCaml is in the higher-level utilities, for example virt-v2v (https://github.com/libguestfs/libguestfs/tree/master/v2v) and virt-builder (https://github.com/libguestfs/libguestfs/tree/master/builder) are substantial OCaml programs.