Forests and woodlands represent a substantial stock of carbon that is contained in soil, trees and other vegetation. They are a key component of the global carbon cycle and their effective management, at both global and regional scales, is an important mechanism for reducing greenhouse gases in the atmosphere. Understanding what determines the size of forest and woodland carbon stocks, and the processes and controls on the exchanges of carbon dioxide and other greenhouse gases, is critical in helping the forestry sector to contribute to reducing anthropogenic climate change. The objective of this review is to provide that understanding by summarising key information on carbon stocks in British forests, the fluxes of carbon dioxide and other greenhouse gases, how these are affected by changes as trees grow, and how they are affected by forest operations and other forest management decisions. This report will be of interest to forest managers, policymakers and researchers involved in estimating and understanding forest carbon and greenhouse balances, particularly in British conditions, how the balances can be affected by management, and what the limitations are to our knowledge.