Conservationists strive for practical, cost-effective management solutions to forest-based species conservation and climate change mitigation. However, this is compromised by insufficient information about the effectiveness of protected areas in increasing carbon storage, and the co-benefits of species and carbon conservation remain poorly understood. Here, we present the first rigorous quantitative assessment of the roles of giant panda nature reserves (NRs) in carbon sequestration, and explore the co-benefits of habitat conservation and climate change mitigation. Results show that more than 90% of the studied panda NRs are effective in increasing carbon storage, with the mean biomass carbon density of the whole NRs exhibiting a 4.2% higher growth rate compared with lands not declared as NRs over the period 1988-2012, while this effectiveness in carbon storage masks important patterns of spatial heterogeneity across the giant panda habitats. Moreover, the significant associations have been identified between biomass carbon density and panda's habitat suitability in ~85% NRs and at the NR level. These findings suggest that the planning for carbon and species conservation co-benefits would enhance the greatest return on limited conservation investments, which is a critical need for the giant panda after its conservation status has been downgraded from "endangered" to "vulnerable".