Estimates of carbon emissions from the forest sector in Mexico are derived for the year 1985 and for two contrasting scenarios in 2025. The analysis covers both tropical and temperate closed forests. In the mid-1980s, approximately 804,000 ha/year of closed forests suffered major perturbations, of which 668,000 ha was deforestation. Seventy-five percent of total deforestation is concentrated in tropical forests. The resulting annual carbon balance from land-use change is estimated at 67:0 106 tons/year, which lead to net emissions of 52:3 106 tons/year accounting for the carbon uptake in restoration plantations and degraded forest lands. This last figure represents approximately 40% of the country’s estimated annual total carbon emissions for 1985–1987. The annual carbon balance from the forest sector in 2025 is expected to decline to 28:0 106 t in the reference scenario and to become negative (i.e., a carbon sink), 62:0 106 t in the policy scenario. A number of policy changes are identified that would help achieve the carbon sequestration potential identified in this last scenario. 1.