Very little is known about the effect of overgrazing on carbon loss from soil in semi-arid savannas and woodlands of South America. Soil carbon parameters were measured in a 10,000 ha restoration project in the western Chaco of Argentina (24 degrees 43'S and 63 degrees 17'W). Three situations were compared: highly restored (HRS), moderately restored (MRS) and highly degraded (HDS). Soil and litter samples were recovered in the dry and wet seasons. SOC and CO2-C values decreased from the HRS (7.0 kg m(-2) and 130 g m(-2)) to the HDS (1.5 kg m(-2) and 46 g m(-2)) whereas the C mineralization rate increased toward the less restored sites (0.96-2.29). Surface-litter C was similar in both sites under restoration (260 and 229 g m(-2)), bring non-existent at the HDS. Leaves from woody species dominated surface-litter in the HRS, whereas grass material was predominant in the MRS. During the wet season, the SOC decreased, whereas both CO2-C and C mineralization rate increased. The magnitude of the between-season differences was highest at the HDS (62% in SOC, 55% in CO2, and 80% in C mineralization rate). We estimated that C loss since introduction of cattle into the forest was 58 Mg ha(-1), reaching a total of 2 x 10(15) g at for the entire Chaco. These values are higher than those caused by the conversion of savannas and other ecosystems into agriculture or cultivated pastures. The amount of C fixed in the highly restored site (275 g ha(-1) per year) indicates that the Chaco soils have a significant potential as atmospheric carbon sinks. (C) 2001 Elsevier Science B.V. All rights reserved.