To counter increasing CO2 emissions and plant biodiversity loss, ecological restoration has been proposed as a means to sequester carbon as well as to increase species diversity in tropical landscapes. Here we examine how natural regeneration is associated with changing plant diversity and carbon stocks in the Atlantic Forest of southern Brazil. Aboveground carbon stocks and plant species diversity (using taxonomic, functional, phylogenetic and conservation metrics) were estimated in areas undergoing natural regeneration, ranging in age from seven to >80 years. Aboveground carbon, diversity and conservation metrics increase rapidly and concomitantly over time during forest natural regeneration, but even with carbon increase over time, we found the maximum taxonomic and phylogenetic diversity possible for the region. These results show the importance of considering regeneration as an alternative to increase carbon stocks, diversity, and species conservation in carbon-focused restoration plans. Our results showed co-benefits between carbon stocks, diversity, and conservation. Diversity (taxonomic, functional, and phylogenetic) increases along with carbon stocks, but functional evenness does not. Age of the areas also influences co-benefits, as they increase over time. Thus, we demonstrate that ecological restoration not only sequesters carbon and has benefits with respect to climate change but is also responsible for increasing biodiversity and conservation. This mutualism between different benefits of natural regeneration attends to a variety of international concerns.