Given the worldwide plans for extensive tree planting we urgently need to understand how and where implementation will contribute to goals such as those for carbon sequestration. We used a long-term, large-scale native reforestation project in the Scottish Highlands to assess the response of carbon storage and other ecosystem functions to reforestation and grazing exclusion. We measured above-ground carbon, topsoil carbon, topsoil nitrogen, decomposition rates, soil invertebrate feeding activity, tree regeneration, and ground-layer and moss height at 14 sites that are in the early stages of reforestation and fenced to exclude grazing. Reforestation areas were compared to unforested and mature forest areas that are both grazed and ungrazed, using 10 × 10 m plots. Above-ground carbon in the reforestation plots (1.4 kg/m² [95% CI: 0.6, 2.6], average age 20 years since reforestation) was c. 8% of the mature forest plots (17.1 kg/m² [13.1, 21.8]). Topsoil carbon was lower in the reforestation plots (18.78 kg/m² [11.79, 25.78]) than in the unforested (29.82 kg/m² [24.34, 35.29]) or mature forest (31.39 kg/m² [22.91, 39.88]) plots. Responses of other functions to the reforestation and grazing interventions varied. Our results suggest that reforestation may trigger carbon loss from areas with high initial soil carbon even with low disturbance establishment, at least in the short term. Our work emphasises where we lack knowledge: on the potential for long-term re-accumulation of soil carbon under semi-natural native reforestation, soil carbon sequestration in the deeper soil layers and the response of soil carbon to natural regeneration.