This study was conducted in the Gurra watershed of the Chelia District to determine the current state of soil characteristics as well as the current organic carbon and equivalent CO2 sequestration potential of the watershed's various land uses (forest, grazing, and agricultural). Random sampling techniques were used to collect composite soil samples from (0-30cm) depth for each land use, which were then tested for selected soil physicochemical parameters using conventional protocols. The forest and cultivated land textural classes were loam clay loam and loam clay loam, respectively. Soil pH in forest and grazing lands respectively were 5.9 and 5.2. Higher BD in grazing (1.113g/cm3) and lower (0.818g/cm3) in forest land was recorded. The values of micro nutrients Fe, Cu, Mn and Zn (282.07, 3.768, 44.94 and 2.82ppm) and Fe, Cu, Mn and Zn respective values of (107.44, 0.932, 16.51 and 0.433ppm) were recorded forest and cultivated lands, respectively. Similarly, the highest (10.24%) and lowest (4.31%) SOM were recorded in forest and cultivated lands. The same was true for TN(0.56, 0.22)%, available P(16.28, 0.28) ppm and total P(37.28, 0.64) ppm, CEC(64, 37.3)cmol(+)kg-1, exchangeable bases(54.26, 21.66) cmol (+)kg-1 and OC(5.94, 2.5)%. However, exchangeable acidity (1.6, 0.48) cmol (+) kg-1 was recorded in cultivated and lowest in forest land. The watershed sequestered 84,150 tons of CO2e and stored 22,930 tons of SOC with estimated value of USD 336,600 in the current value. Similarly, SOC sequestration potential and equivalent CO2 sink potential were deceasing (14.58, 8.92 and 6.33)t/h and(53.52, 32.72 and 23.23) t/ha from forest, Grazing and cultivated lands, respectively. Land uses have an effect on soil physicochemical proprieties and also on climate changes. Lowest amount of OC, OM and TN was recorded in cultivated land. SOC storage potential of cultivated land (6.33Mg/ha) was almost 2 times lower than that of forest land (14.58Mg/ha). In this study, forest land was the major reservoir of SOC and sinks of CO2e and plays a significant role in mitigating climate change and improving the fertility and productivity of the lands. Effects of land use changes can be seen not only in soil properties but also on climate changes. Therefore, due attention shall be given to improve soil properties, to conserve natural resources by using crop residue, crop rotation, applying fallowing and agro-forestry practices as well as incorporating SOC in polices of green economy and planting N-fixing species in the area.