Degraded lands are common in human-influenced tropical semiarid areas, and the potential for C sequestration through rehabilitation of these areas is substantial. In this study, we investigated changes in ecosystem C stocks (ECS) after establishing exclosures on degraded communal grazing lands, and identified easily measurable biophysical and management-related factors that can be used to predict ECS restoration in the highlands of Tigray, Ethiopia. We selected replicated (n = 3) 5-, 10-, 15-, and 20-yr-old exclosures and paired each exclosure with an adjacent communal grazing land. All exclosures displayed higher ECS than the communal grazing lands. Differences in ECS between exclosures and grazing lands varied between 29 (±4.9) and 61 (±6.7) Mg C ha−1 and increased with exclosure duration. In exclosures, much of the variability in ECS was explained by a combination of the following variables: precipitation, clay content, vegetation canopy cover, woody biomass, and exclosure duration (R 2 = 0.77–0.90). Precipitation and vegetation canopy cover also explained much of the variability of ECS in communal grazing lands (R 2 = 0.48–0.55). Our results help to establish baseline information for C sequestration projects and to predict the expected ecosystem C sequestration under exclosures. Expansion of exclosures would increase grazing pressure on the remaining communal grazing area. Therefore, the decision to establish additional exclosures should also include an economic analysis and an evaluation of the social consequences.