With an increasing fraction of the world's forests being intensively managed for meeting humanity's need for wood, fiber and ecosystem services, quantitative understanding of the functional changes in these ecosystems in comparison with natural forests is needed. Inparticular, the role of managed forests as long-term carbon (C) sinks and for mitigating climate change require a detailed assessment of their carbon cycle on different temporal scales. In the current review we assess available data on the structure and function of the world's forests, explore the main differences in the C exchange between managed and unmanaged stands, and explore potential physiological mechanisms behind both observed and expected changes. Two global databases that include classification for management indicate that managed forests are about 50 years younger, include 25% more coniferous stands, and have about 50% lower C stocks than unmanaged forests. The gross primary productivity (GPP) and total net primary productivity (NPP) are the similar, but relatively more of the assimilated carbon is allocated to aboveground pools in managed than in unmanagedforests, whereas allocation tofine roots and rhizosymbiontsis lower. This shift inallocation patterns ispromotedbyincreasing plant size, and by increased nutrient availability. Long-term carbon sequestration potential in soils is assessed through the ratio of heterotrophic respiration tototaldetritus production, which indicatesthat (i) the forestsoils maybe losing more carbon on an annual basis than they regain in detritus inputs, and (ii) the deficit appearstobegreater in managedforests. While climate change and management factors (esp. fertilization) both contribute to greater carbon accumulation potential in the soil, the harvest-related increase in decomposition affects the C budget over the entire harvest cycle. Although the findings do not preclude the use of forests for climate mitigation, maximizing merchantable productivity may have