Invasive insects can impact ecosystem functioning by altering carbon, nutrient, and hydrologic cycles. In this study, we used eddy covariance to measure net CO2 exchange with the atmosphere (NEE), and biometric measurements to characterize net ecosystem productivity (NEP) in oak- and pine-dominated forests that were defoliated by Gypsy moth (Lymantria dispar L.) in the New Jersey Pine Barrens. Three years of data were used to compare C dynamics; 2005 with minimal defoliation, 2006 with partial defoliation of the canopy and understory in a mixed stand, and 2007 with complete defoliation of an oak-dominated stand, and partial defoliation of the mixed and pine-dominated stands. Previous to defoliation in 2005, annual net CO2 exchange (NEEyr) was estimated at −187, −137 and −204 g C m−2 yr−1 at the oak-, mixed-, and pine-dominated stands, respectively. Annual NEP estimated from biometric measurements was 108%, 100%, and 98% of NEEyr in 2005 for the oak-, mixed-, and pine-dominated stands, respectively. Gypsy moth defoliation strongly reduced fluxes in 2006 and 2007 compared with 2005; NEEyr was −122, +103, and −161 g C m−2 yr−1 in 2006, and +293, +129, and −17 g C m−2 yr−1 in 2007 at the oak-, mixed-, and pine-dominated stands, respectively. At the landscape scale, Gypsy moths defoliated 20.2% of upland forests in 2007. We calculated that defoliation in these upland forests reduced NEEyr by 41%, with a 55% reduction in the heavily impacted oak-dominated stands. ‘Transient’ disturbances such as insect defoliation, nonstand replacing wildfires, and prescribed burns are major factors controlling NEE across this landscape, and when integrated over time, may explain much of the patterning of aboveground biomass and forest floor mass in these upland forests.