This paper presents estimates of the rate of forest use, deforestation and forest degradation, as well as the corresponding carbon hows, in the Tanzanian forest sector. It is estimated that the country lost 525,000 ha of forests in 1990, with associated committed emissions of 31.5 Mt carbon (MtC), and 7.05 MtC of committed carbon sequestration. The paper then describes the possible response options in the forest sector to mitigate GHG emissions, and evaluates the most stable subset of these-i.e. forest conservation, woodfuel plantations and agroforestry. The conservation options were found to cost an average of U.S.$1.27 per tonne of carbon (tC) conserved. Five options for fuelwood plantations and agroforestry, with two different ownership regimes were evaluated. Each one of the options gives a positive net present value at low rates of discount, ranging from U.S.$1.06 to 3.4/tC of avoided emissions at 0% discount rate. At 10% discount, the eucalyptus and maize option has a highest PNV of U.S.$1.73/tC, and the government plantation gives a negative PNV (loss) of U.S.$0.13 tC sequestered. The options with a private/community type of ownership scheme fared better than government run options. This conclusion also held true when ranking the options by the BRAG indicator, with the government fuelwood plantation ranked the lowest, and the private agroforestry option of eucalyptus and corn performing best. The mitigation options evaluated here show that the forest sector in Tanzania has one of the most cost-effective GHG mitigation opportunities in the world, and they are within the developmental aspirations of the country.