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Concerns about rapid tropical deforestation, and its contribution to rising atmospheric concentrations of greenhouse gases, increase the importance of monitoring terrestrial carbon storage in changing landscapes. Emerging markets for carbon emission offsets may offer developing nations needed incentives for reforestation, rehabilitation, and avoided deforestation. However, relatively little empirical data exists regarding carbon storage in African tropical forests, particularly for those in arid or semi-arid regions. Kenya's 416 km² Arabuko-Sokoke Forest (ASF) is the largest remaining fragment of East African coastal dry forest and is considered a global biodiversity hotspot (Myers et al. 2000), but has been significantly altered by past commercial logging and ongoing extraction. Forest carbon storage for ASF was estimated using allometric equations for tree biomass, destructive techniques for litter and herbaceous vegetation biomass, and spectroscopy for soils. Satellite imagery was used to assess land cover changes from 1992 to 2004. Forest and thicket types (Cynometra webberi dominated, Brachystegia spiciformis dominated, and mixed species forest) had carbon densities ranging from 58 to 94 Mg C/ha. The ASF area supported a 2.8-3.0 Tg C carbon stock. Although total forested area in ASF did not change over the analyzed time period, ongoing disturbances, quantified by the basal area of cut tree stumps per sample plot, correlated with decreased carbon densities. Madunguni Forest, an adjoining forest patch, lost 86% of its forest cover and at least 76% of its terrestrial carbon stock in the time period. Improved management of wood harvesting in ASF and rehabilitation of Madunguni Forest could substantially increase terrestrial carbon sequestration in the region.