Climate warming is most pronounced at high latitudes, which could result in the intensification of the extensively cultivated areas in the boreal zone and could further enhance rates of forest clearing in the coming decades. Using paired forest-field sampling and a chronosequence approach, we investigated the effect of conversion of boreal forest to agriculture on carbon (C) and nitrogen (N) dynamics in interior Alaska. Chronosequences showed large soil C losses during the first two decades following deforestation, with mean C stocks in agricultural soils being 44% or 8.3 kg m−2 lower than C stocks in original forest soils. This suggests that soil C losses from land-use change in the boreal region may be greater than those in other biomes. Analyses of changes in stable C isotopes and in quality of soil organic matter showed that organic C was lost from soils by combustion of cleared forest material, decomposition of organic matter and possibly erosion. Chronosequences indicated an increase in C storage during later decades after forest clearing, with 60-year-old grassland showing net ecosystem C gain of 2.1 kg m−2 over the original forest. This increase in C stock resulted probably from a combination of large C inputs from belowground biomass and low C losses due to a small original forest soil C stock and low tillage frequency. Reductions in soil N stocks caused by land-use change were smaller than reductions in C stocks (34% or 0.31 kg m−2), resulting in lower C/N ratios in field compared with forest mineral soils, despite the occasional incorporation of high-C forest-floor material into field soils. Carbon mineralization per unit of mineralized N was considerably higher in forests than in fields, which could indicate that decomposition rates are more sensitive in forest soils than in field soils to inorganic N addition (e.g. by increased N deposition from the atmosphere). If forest conversion to agriculture becomes more widespread in the boreal region, the resulting C losses (51% or 11.2 kg m−2 at the ecosystem level in this study) will induce a positive feedback to climatic warming and additional land-use change. However, by selecting relatively C-poor soils and by implementing management practices that preserve C, losses of C from soils can be reduced.