This review places into context the role that forest ecosystems play in the global carbon cycle, and their potential interactions with climate change. We first examine the natural, preindustrial carbon cycle. Every year forest gross photosynthesis cycles approximately one–twelfth of the atmospheric stock of carbon dioxide, accounting for 50% of terrestrial photosynthesis. This cycling has remained almost constant since the end of the last ice age, but since the Industrial Revolution it has undergone substantial disruption as a result of the injection of 480 PgC into the atmosphere through fossil–fuel combustion and land–use change, including forest clearance. In the second part of this paper we review this ‘carbon disruption’, and its impact on the oceans, atmosphere and biosphere. Tropical deforestation is resulting in a release of 1.7 PgC yr−1 into the atmosphere. However, there is also strong evidence for a ‘sink’ for carbon in natural vegetation (carbon absorption), which can be explained partly by the regrowth of forests on abandoned lands, and partly by a global change factor, the most likely cause being ‘fertilization’ resulting from the increase in atmospheric CO2. In the 1990s this biosphere sink was estimated to be sequestering 3.2 PgC yr−1 and is likely to have substantial effects on the dynamics, structure and biodiversity of all forests. Finally, we examine the potential for forest protection and afforestation to mitigate climate change. An extensive global carbon sequestration programme has the potential to make a particularly significant contribution to controlling the rise in CO2 emissions in the next few decades. In the course of the whole century, however, even the maximum amount of carbon that could be sequestered will be dwarfed by the magnitude of (projected) fossil–fuel emissions. Forest carbon sequestration should only be viewed as a component of a mitigation strategy, not as a substitute for the changes in energy supply, use and technology that will be required if atmospheric CO2 concentrations are to be stabilized.