Spontaneous forest expansion following land abandonment can play a key role in achieving European targets for climate-change mitigation and biodiversity conservation. Understanding how biodiversity relates to carbon (C) stocks across successional stages can inform management strategies that simultaneously promote species diversity and C sequestration, thereby optimizing land use for ecosystem multifunctionality. We analysed 16 chronosequences spanning five successional stages, from meadows and pastures to mature forests (up to ∼75 years since abandonment), organized into four clusters along a latitudinal gradient in Italy, encompassing the Alpine, Continental, and Mediterranean biogeographical regions. We quantified vegetation, deadwood, and soil C pools and calculated diversity indices for herbaceous plant species. Linear and generalized linear mixed models were used to assess successional stage and site effects on C stocks and diversity indices. Total ecosystem C increased along succession, driven primarily by tree biomass, reaching 195–289 Mg C ha−1 in late-successional forests. Soil C showed no clear successional trend, with weak or site-specific patterns. Herbaceous species richness and diversity peaked in managed meadows/pastures and early encroachment stages but declined towards closed-canopy forests in three sites. By contrast, a U-shaped pattern emerged in the southernmost site. Consequently, the C–diversity relationship was predominantly negative, except for the non-linear response observed in the Mediterranean site. Overall, spontaneous reforestation promotes C storage but often reduce herbaceous plant diversity, revealing potential trade-offs between climate mitigation and plant diversity. However, under favourable environmental conditions, partial recovery of plant diversity in late-successional forests may occur, suggesting for win-win management policies.