Urban forests can play an important role in mitigating the impacts of climate change by reducing atmospheric carbon dioxide (CO2). Quantification of carbon (C) storage and sequestration by urban forests is critical for the assessment of the actual and potential role of urban forests in reducing atmospheric CO2. This paper provides a case study of the quantification of C storage and sequestration by urban forests in Shenyang, a heavily industrialized city in northeastern China. The C storage and sequestration were estimated by biomass equations, using field survey data and urban forests data derived from high-resolution QuickBird images. The benefits of C storage and sequestration were estimated by monetary values, as well as the role of urban forests on offsetting C emissions from fossil fuel combustion. The results showed that the urban forests in areas within the third-ring road of Shenyang stored 337,000t C (RMB92.02 million, or $ 13.88 million), with a C sequestration rate of 29,000t/yr (RMB7.88 million, or $ 1.19 million). The C stored by urban forests equaled to 3.02% of the annual C emissions from fossil fuel combustion, and C sequestration could offset 0.26% of the annual C emissions in Shenyang. In addition, our results indicated that the C storage and sequestration rate varied among urban forest types with different species composition and age structure. These results can be used to help assess the actual and potential role of urban forests in reducing atmospheric CO2 in Shenyang. In addition, they provide insights for decision-makers and the public to better understand the role of urban forests, and make better management plans for urban forests.