Within the framework of the Kyoto Protocol, the potential mitigation of greenhouse gas emissions by terrestrial ecosystems has placed focus on carbon sequestration following afforestation of former arable land. Central to this soil C sequestration are the dynamics of soil organic matter (SOM). In North Eastern Italy, a mixed deciduous forest was planted on continuous maize field soil with a strong C4 isotopic C signature 20 years ago. In addition, a continuous maize field and a relic of the original permanent grassland were maintained at the site, thus offering the opportunity to compare the impacts on soil C dynamics by conventional agriculture, afforestation and permanent grassland. Soil samples from the afforested, grassland and agricultured systems were separated in three aggregate size classes, and inter- vs. intra-aggregate particulate organic matter was isolated. All fractions were analyzed for their C content and isotopic signature. The distinct 13C signature of the C derived from maize vegetation allowed the calculation of proportions of old vs. forest-derived C of the physically defined fractions of the afforested soil. Long-term agricultural use significantly decreased soil C content (−48%), in the top 10 cm, but not SOM aggregation, as compared to permanent grassland. After 20 years, afforestation increased the total amount of soil C by 23% and 6% in the 0–10 and in the 10–30 cm depth layer, respectively. Forest-derived carbon contributed 43% and 31% to the total soil C storage in the afforested systems in the 0–10 and 10–30 cm depths, respectively. Furthermore, afforestation resulted in significant sequestration of new C and stabilization of old C in physically protected SOM fractions, associated with microaggregates (53–250 μm) and silt&clay (<53 μm).