Using forests to mitigate climate change has gained much interest in science and policy discussions. We examine the evidence for carbon benefits, environmental and monetary costs, risks and trade-offs for a variety of activities in three general strategies: (1) land use change to increase forest area (afforestation) and avoid deforestation; (2) carbon management in existing forests; and (3) the use of wood as biomass energy, in place of other building materials, or in wood products for carbon storage. We found that many strategies can increase forest sector carbon mitigation above the current 162–256 Tg C/yr, and that many strategies have co-benefits such as biodiversity, water, and economic opportunities. Each strategy also has trade-offs, risks, and uncertainties including possible leakage, permanence, disturbances, and climate change effects. Because ∼60% of the carbon lost through deforestation and harvesting from 1700 to 1935 has not yet been recovered and because some strategies store carbon in forest products or use biomass energy, the biological potential for forest sector carbon mitigation is large. Several studies suggest that using these strategies could offset as much as 10–20% of current U.S. fossil fuel emissions. To obtain such large offsets in the United States would require a combination of afforesting up to one-third of cropland or pastureland, using the equivalent of about one-half of the gross annual forest growth for biomass energy, or implementing more intensive management to increase forest growth on one-third of forestland. Such large offsets would require substantial trade-offs, such as lower agricultural production and non-carbon ecosystem services from forests. The effectiveness of activities could be diluted by negative leakage effects and increasing disturbance regimes. Because forest carbon loss contributes to increasing climate risk and because climate change may impede regeneration following disturbance, avoiding deforestation and promoting regeneration after disturbance should receive high priority as policy considerations. Policies to encourage programs or projects that influence forest carbon sequestration and offset fossil fuel emissions should also consider major items such as leakage, the cyclical nature of forest growth and regrowth, and the extensive demand for and movement of forest products globally, and other greenhouse gas effects, such as methane and nitrous oxide emissions, and recognize other environmental benefits of forests, such as biodiversity, nutrient management, and watershed protection. Activities that contribute to helping forests adapt to the effects of climate change, and which also complement forest carbon storage strategies, would be prudent.