While over-compensatory plant growth in response to grazing has been observed in some species and communities under certain conditions, it is widely accepted that excessive grazing is detrimental to plant productivity and may lead to declines in soil organic matter. Changes in grassland management which reverse the process of declining productivity may lead to increased soil C. Thus, rehabilitation of areas degraded by historical overgrazing can potentially sequester atmospheric C. Based on literature values, we found that overgrazed grassland soils contained an average of 2.43 t C ha-1, or 11.5%, less soil C which can potentially be recovered with improved management. Based on these data, changes in soil C over time were regressed against climatic variables. Carbon sequestration potential was positively related to potential evapotranspiration and negatively related to mean annual temperature. This regression relationship was used to extrapolate C sequestration potential to overgrazed grasslands worldwide. The Global Assessment of Soil Degradation (GLASOD) and International Geosphere Biosphere Program DISCover datasets were integrated to generate a global map of overgrazed grassland area. Approximately 7.5% of the world's grasslands have been overgrazed, with most (89%) lightly to moderately overgrazed. We estimate that 46 Tg C yr-1 can be sequestered in these grassland soils with implementation of moderate grazing regimes in overgrazed areas. Nearly two-thirds of estimated C storage potential is found in grasslands located in developing countries and most C storage potential (81%) exists in grassland areas where soil degradation can be reversed with limited investments achievable by private land owners.