The mitigation of global warming and conservation of biodiversity are two significant environmental challenges today. Estimating and comparing forest carbon stock and plant diversity under different management approaches provide insight into the choice of management approaches for carbon and plant diversity management. We investigated the variation in carbon stock and diversity of plant species in two forest managements under different approaches: the Kakrebihar protection forest (PF) and Sano Surkhet community forest (CF) in Karnali Province, Surkhet, Nepal. In total, 63 sample plots (30 plots in PF and 33 plots in CF) were laid out systematically across the forests. Dendrometric measurements were carried out for trees, poles, and saplings, and representative leaf litter and herb samples were collected. Soil samples were taken at 10 cm, 20 cm, and 30 cm depths using a soil auger. The existing tree volume equations of tree species of interest were used to estimate tree volume, and species-specific wood density and conversion factors were used to obtain total biomass and carbon content. Soil samples were analyzed using the Walkley-Black method to determine soil organic carbon. PF had higher carbon stock, plant species richness, and abundance at the landscape level than CF; however, the scenario differed at the plot level. At the plot level, PF had significantly higher total carbon stock and biomass carbon stock than CF. However, PF and CF were statistically indistinguishable in term of soil carbon stock. At the plot level, PF and CF were statistically indistinguishable regarding richness, Simpson diversity, and Shannon diversity, but PF had significantly higher plant abundance than CF. In conclusion, the value of PF for carbon stock and plant diversity surpassed those of CF. This study suggests that PF might be a better strategy to enhance carbon stock in forests and maintain habitat for various plant species.