Quantifying forest carbon storage and carbon sequestration potential provides scientific support to evaluating the potential contribution of forest to climate change mitigation, which is of great significance to international negotiations and domestic decision support to climate change. How to manage the forests with a sustainable method to ensure the balance between timber yield and carbon sink is a very important issue. In order to accurately evaluate the carbon storage and potential timber production of forests in Southwest China, based on the seventh (20042008) and eighth (20092013) forest inventory data of five provinces in Southwest China,we used IPCC volume-biomass methods to estimate the carbon storage and carbon density in southwest provinces. Combined with growth target of the forest area and accumulation in forestry management plan of Southwest provinces and to predict carbon sequestration potential and timber yield during 20102050. The main conclusions are as follows: The total carbon storage in forest biomass in SW China is 2 449.06 Tg, and the average carbon density is 57.64 Mg·hm~(-2) in 2010. The order of forest carbon storage in each province is: Tibet>Yunnan>Sichuan>Guizhou>Chongqing, and the order of carbon density is: Tibet>Sichuan> Yunnan>Chongqing>Guizhou. By 2050, the forest carbon storage under logging and non-logging scenarios in SW China is 3 829.18 Tg and 4 057.29 Tg, respectively, while the forest carbon density is 81.60 Mg·hm~(-2) and 85.08 Mg·hm~(-2) respectively. Compared with non-logging scenario, logging decreased forest carbon storage and carbon density by 228.11 Tg and 3.48 Mg·hm~(-2) by 2050, respectively. However, logging can provide more than 786 million cubic meters of timber during 20102050. Since the high proportion of the area of young and middle-aged forests in SW China, there is enormous potential of increasing forest carbon storage and carbon density in the future if with forest growing and maturity. Reasonable proportion of forest harvesting and regeneration will serve the purpose of increasing forest carbon sequestration, forest quality and timber production simultaneously.