No-tillage cropping systems with direct seeding into a mulch of plant residues from cover crops – the so-called direct seeding mulch-based cropping (DMC) systems – have been adopted widely over the last 10–15 years in the Cerrado region of Brazil. They are replacing the traditional soybean monoculture with bare fallow using conventional tillage (CT) practices. The objective of this study was to examine how DMC practices affect soil organic carbon (SOC) dynamics and to assess their potential for enhanced soil carbon (C) storage. The approach was to determine soil C stocks along a chronosequence of fields under DMC, and then to apply the generic decomposition and yield (G'DAY) plant–soil model to analyse the soil C storage potential for a number of cropping systems. Forty-five fields were selected on a plateau of Ferralsols in the central Cerrado region to represent a chronosequence of 0–12 years under continuous DMC. Before DMC the fields had been under CT soybean monoculture following the clearing of the native savannah. An average increase in SOC stocks of 0.83 Mg C ha−1 yr−1 in the 0–20 cm topsoil was measured. The corresponding increase in total soil nitrogen was 79 kg N ha−1 yr−1. The G'DAY model predicted a net accumulation of 0.70–1.15 Mg C ha−1 yr−1 in the 0–40 cm topsoil for the first 12 years, depending on the type of soil and DMC system. Model predictions showed that less soil C was accumulated under DMC systems that commenced immediately after clearing the native savannah. Gains in soil C under DMC were primarily due to the introduction of a second crop that caused higher net primary productivity, leading to higher plant C inputs to soil. A rough estimation shows that the conversion of 6 million ha of CT soybean monoculture to DMC in the Cerrados would enhance soil C storage by 4.9 Tg C yr−1 during at least the first 12 years following the conversion to DMC.