Forest biomes are major reserves for terrestrial carbon, and major components of global primary productivity. The carbon balance of forests is determined by a number of component processes of carbon acquisition and carbon loss, and a small shift in the magnitude of these processes would have a large impact on the global carbon cycle. In this paper, we discuss the climatic influences on the carbon dynamics of boreal, temperate and tropical forests by presenting a new synthesis of micrometeorological, ecophysiological and forestry data, concentrating on three case-study sites. Historical changes in the carbon balance of each biome are also reviewed, and the evidence for a carbon sink in each forest biome and its likely behaviour under future global change are discussed. We conclude that there have been significant advances in determining the carbon balance of forests, but there are still critical uncertainties remaining, particularly in the behaviour of soil carbon stocks.