As the most important way to mitigate climate change, forest carbon storage has been the subject of extensive research. A comprehensive study was carried out to investigate the influence of elevation gradients and diameter classes on the forest growth, composition, diversity, and carbon pools of the Bagh Drush Khel Forest area. Research revealed that elevation gradients significantly influenced the composition, diversity, and carbon pools in forests. At lower elevations, Eucalyptus camaldulensis was the dominant species, with Olea ferruginea as a co-dominant species, whereas at higher elevations, Pinus roxburghii was the dominant species with Quercus incana as a co-dominant species. Regeneration was higher at higher elevations with the maximum number of saplings and seedlings of P. roxburghii. Species diversity association with elevation was negative (R2 = −0.44; p < 0.05—Shannon Index). Soil organic carbon (SOC association with elevation was non-significant while positive with DBH classes (R2 = 0.37; p < 0.05). Overall, carbon pool association with elevation and diameter at breast height (DBH) were negative (R2 = −0.73; p < 0.05) and (R2 = −0.45; p < 0.05). Litter biomass correlated positively with elevation (R2 = 0.25; p < 0.05) and DBH (R2 = 0.11; p < 0.05), while deadwood biomass correlated negatively with elevation gradients (R2 = −0.25; p < 0.05), and no effect was observed for DBH classes. The highest carbon stock (845.89 t C/ha) was calculated at low elevations, which decreased to (516.27 t C/ha) at high elevations. The overall carbon stock calculated was (2016.41 t C/ha) respectively. A total of six tree species were found at the study site. Future research is essential for forest health monitoring and understanding fine-scale impacts. This study offers a methodological framework for similar investigations in unexplored yet potentially significant forest regions worldwide.