Carbon balance of cultivated soil (loamy Phaeozems) under fallow was compared with that of soils abandoned 1, 5, 10, and 25 years converted naturally to permanent grassland (Moscow region, Russia). Carbon inflow or net primary production (NPP) was calculated as the sum of the above and below ground productivity of grassland ecosystems. The total C outflow was equal to the annual CO₂ fluxes from the soils and was estimated as CO₂ emission measured by the closed chamber method. Carbon balance (CB) was defined as the difference between respiration of heterotrophs and NPP. Botanical survey clearly showed that the vegetation of abandoned agricultural lands changed to permanent grasslands after 5 years of abandonment. Carbon inflow increased from 97 g C·m-2·yr^-1 in the arable soils to 1100 g C·m-2·yr^-1 in the 10-yr grassland. Total annual carbon losses from soils as CO₂ amounted to 347-845 g C·m-2·yr^-1. Heterotrophic respiration varied from 272 g C·m-2·yr^-1 in cultivated soil to 411 g C·m-2·yr^-1 in 25-yr grassland. Our estimations showed that 5, 10, and 25 yr grasslands act as carbon sink and their C balance constituted -217 g C·m-2·yr^-1, -778 g C·m-2·yr^-1 and -473 g C·m-2·y^-1, respectively. Arable soils under the fallow act as CO₂ source (CB = +175 g C·m-2·yr^-1). Carbon balance of the one-year grassland was close to zero. Hence, after 5 years abandonment former arable lands converted to permanent grasslands become a stable C sink.