Soil, an important component of land, has numerous functions and ecosystem services essential to all terrestrial life. Soil degradation, decline in its capacity to support functions and provide ecosystem services, is caused by accelerated erosion, salinization, elemental imbalance, acidification, depletion of soil organic carbon (SOC), reduction in soil biodiversity, and decline in soil structure and tilth. Desertification, a sub-set of degradation, specifically refers to decline in soil quality and functions in arid climates. Climate change affects and is affected by soil degradation through a positive feed back due to increase in mineralization of SOC pool and the radiative forcing. Desertification may lead to a net increase in temperature despite change in albedo of the denuded surface. Feedbacks and threshold amplify the risks of degradation, and the projected climate change may exacerbate all four types of drought (i.e., meteorological, hydrological, pedagogical, and ecological). The mutually reinforcing positive feedbacks between soil degradation and climate change are strongly influenced by social, economic, political, and cultural factors. There exists a strong link between poverty, desperateness, and societal collapse on soil degradation and climate change. Restoration of degraded and desertified soils, converting marginal agricultural areas to rangeland and forest land, and adoption of recommended management practices have a large technical potential to sequester carbon and off-set anthropogenic emissions, improve the environment, and enhance and sustain agronomic productivity. Important among recommended management practices are using conservation agriculture and mulch farming, establishing cover crops, adopting strategies of integrated nutrient management, and those which create positive C and nutrient budgets and soil/water conservation within a watershed. Long-term research is needed which is hypothesis-driven, uses modern innovative research and modeling tools, is based on community involvement, and provides decision support systems to policy makers and land managers.