Abstract. Afforestation is a strategy to sequester atmospheric carbon in the terrestrial system and to enhance ecosystem services. Iceland's large areas of formerly vegetated and now degraded ecosystems therefore have a high potential to act as carbon sinks. Consequently, the ecological restoration of these landscape systems is part of climate mitigation programs supported by the Icelandic government. The aim of this study was to explore the change of the soil organic carbon (SOC) pools and to estimate the SOC sequestration potential during the re-establishment of birch forest on severely degraded land. Differently aged afforested mountain birch sites (15, 20, 25 and 50 years) were compared with sites of severely degraded land, naturally growing remnants of mountain birch woodland and grasslands which were re-vegetated using fertilizer and grass seeds 50 years ago. The soil was sampled to estimate the SOC stocks and for physical fractionation to characterize the quality of the SOC. The results of our study show that the severely degraded soils can potentially sequester an additional 20 t C ha−1 (0–30 cm) to reach the SOC stock of naturally growing birch woodlands. After 50 years of birch growth, the SOC stock is lower than that of naturally growing birch woodland. Hence, afforested stands can sequester additional SOC after 50 years of birch growth. The SOC fractionation revealed that at all tested sites most of the carbon was stored in the