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Carbon dioxide (CO2) is the major cause of global warming. Many countries including Pakistan have signed the Kyoto Protocol agreement under the United Nations Framework Convention on Climate Change (UNFCC) and agreed to control the release of CO2 and to increase the CO2 sequestration. Agroforestry sector can contribute efficiently in carbon sequestration. This study was carried out to determine the status and potential of agroforestry and its role in carbon sequestration under semi-arid conditions. Data was collected through a multi-objective and pre-tested questionnaire from 250 village farmers in tehsil Sumandri, Pakistan. Height and girth of trees were measured from 250 randomly selected 0.405 ha farm plots. Soil samples from each cropping pattern were collected and analyzed. The whole study area has 2069.19 Mt of above ground carbon stocks and has sequestered a total of 7579.46 Mt of carbon dioxide at the rate of 186201.85 t CO2 yr(-1). Furthermore, the study area has the potential of stocking 3607.61 Mt and sequestering 13214.67 Mt of CO2 at the rate of 327232.46 t CO2 per year. According to calculations, increasing the number of farm trees/ha, average CO2 sequestration rate of the study area can be increased from 2.05 t CO2 ha(-1)yr(-1) to 3.59 t CO2 ha(-1) yr(-1). The role of agroforestry as C sink in not negligible and it should be given a dire consideration in policies, especially, in low forest countries like Pakistan to meets the melinium goals of atmospheric C reduction.