Forests play a critical role in the natural global carbon cycle by capturing carbon from the atmosphere by means of photosynthesis. This study was conducted with the overall objectives of estimating the carbon stock potential of the forest and its implication for mitigation of climate change at the dry Afromontane type of Jib Godo Forest in Farta district, northwestern Ethiopia. The field data was collected through systematic sampling method; laying seven transect lines with 150 m distant between transect and plot. The biomass data of trees were collected from the trees and shrubs having ≥5cm DBH and ≥2m height and the carbon stock of each tree and shrub were analyzed by using allometric equations. Circular plot was used for measuring tree diameter and height. The circular plot with radius of 5 m were used for 5-10 DBH sample collection, while 10 m radius circular plots were for ≥10 DBH. Litter, and soil were collected in a smaller sub-plot. The soil samples were collected from 0-10, 10-20 and 20-30 cm soil depth to determine the potential of soil carbon stock. Losses of ignition and Walkley Black methods were used to estimate litter and soil carbon stocks respectively. The result showed that the total carbon stock of each carbon pool such as AGC, BGC, LC and SOC accounted 174.31, 43.58, 2.45 and 157.68 t/ha respectively, which gives a total carbon stock of 378.02 t/ha. The carbon stock variation among tree species showed that Juniperus procera was the largest carbon reserves while Osyris quadripartite was the least carbon reserve of the study area. The carbon stock variation of each carbon pool along altitudinal and slope gradient indicated that altitude and slope had significant effect only on the SOC pool of depth class (0-10 and 10-20 cm) whereas other carbon pools had no significant effect in the study area. The forest in the study area is a reservoir of high carbon, as it has a good capacity to sink carbon from the atmosphere. To enhance the carbon stock of Jib Godo Forest, it should be integrated with Clean Development Mechanism, carbon and trading system as the Kyoto Protocol. Keywords: Biomass, Carbon Stock, Carbon Sequestration, Climate Change Mitigation, Jib Godo Forest, Ethiopia.