Forests provides various services and particularly, playing an incredibly greater role in balancing the global carbon balance and mitigating climate change by sequestering CO2 and storing organic carbon from the atmosphere. The overall objective of this study was intended to investigate the Carbon stock and CO2 sequestered potentials, along altitudinal, slope and aspect gradients of woody species of Sulula Mofa Forest, Northern Ethiopia. Systematic sampling technique was used to collect data from the three carbon pools. A total of 42 sample plots with size 400m2 for Tree pool, small plots with a size of 1m2 for Litter pool and Soil data collected from five sub-plots within each major plot and a diameter of > 5cm and at the depth up to 30cm land surface. DBH of woody species were measured in each major sampling plot at DBH ≥ 1.3m & the diameter at DBH ≥ 5cm. The biomass of woody species was estimated using the non destructive allometric equation, while appropriate laboratory procedures were used in the analysis of litter and soil biomass. A total of 54 woody plant species categorized into 50 genera and 33 families were recorded and identified. The total carbon stock and CO2 sequestration potentials of the woody species were estimated to 1121.14 t/ha & 4114.59 t/ha respectively, of which tree pools (658.55), Soil pools (315.88) and Litter pools (146.71). In the study forest, 92.59% of carbon stored and CO2e sequestered were contributed by the following ten woody tree species of the study forest; Ficus sur, Juniperus procera, Cupressus lusitanica, Eucalyptus globulus, Acacia abyssinica, Croton macrostachys, Erythrina abyssinica, Olea europaea subsp. cuspidata, Cordia africana and Pteroloblum stellautm with their descending order. Plots in the south and west part of the forest had more species diversity, greater carbon stocks and CO2 sequestration potentials. Plots at the middle and upper altitudes assessed had more species diversity. It can be concluded that the study forest contributes high carbon stock, better sequestration potential and plays a role in climate change mitigation. Thus, we suggests that, stakeholders should adopt effective forest conservation measures and get benefit from the bio-carbon fund from their activity (CDM of the Kyoto Protocol); as financial incentives to improve foresters’ Livelihoods.