This paper provides an analysis of the potential role of the agriculture sector in sequestering carbon, as well as of the basic issues and policy requirements for the implementation of the Clean Development Mechanism (CDM) in the agricultural sector of developing countries. The paper is divided into seven sections. The first section briefly highlights the main issues concerning the role of the agricultural sector in developing countries for the implementation of the CDM, as outlined in the Kyoto Protocol (KP). Section 2 highlights some of the links between the KP and major UN Conventions related to agriculture. In general, the basic objectives and programs of action outlined in UN Conventions such as the Convention on Biodiversity (CBD), the UN Convention to Combat Desertification (UNCCD) and Sustainable Agriculture and Rural Development (SARD) are compatible with the implementation of the CDM through their promotion of improvements in land use and land management practices. Section 3 summarizes available information on the carbon sequestration potential in developing and developed countries. Although the methodology used for measuring the carbon stocks is different and results are presented in different units, a summary of available information provides a basic understanding of the potential role of the agricultural sector in an overall emission reduction strategy. Section 4 provides an estimation of additional net carbon sequestration potential in the Latin America and Caribbean region based upon the FAO study “Agriculture Towards 2015 and 2030”. The estimates derived under several assumptions of land use and management practices indicate an additional net sequestration potential of 62.92 MT and 213.48 MT C per year, including carbon released from deforestation. When additional carbon sequestration from the rehabilitation of degraded lands was also included, the total potential values were estimated to be 105.43 MT and 266.99 MT C per year by 2015 and 2030 in the region. The total potential value of such sequestration capacity is estimated to fall between US$ 1581.45 and $4004.0 million, using a unit value of US$ 15.0 per ton. Section 5 outlines the basic criteria for implementing CDM as mandated under the KP and the role of national governments in their implementation. Section 6 outlines various regulatory and market based measures for CDM implementation, including an outline of policy options for the promotion of the CDM in the agricultural sector of developing countries. In the final section, the role FAO should play in enhancing carbon sequestration and promoting the CDM in the LUCF sector given its position as the Task Manager of the four “land cluster” chapters of UNCED Agenda 21 is addressed. FAO can play a very significant role in facilitating the implementation of CDM and in addressing the north-south equity concerns of emission reduction programs in the LUCF sector.