Abstract: Thinning serves as a key technique measure for regulating stand structure and optimizing ecosystem functions in plantation forests. However, the synergistic mechanisms through which thinning concurrently optimizes timber size structure and enhances carbon sequestration potential in mature Cunninghamia lanceolata (Chinese fir) plantations remain poorly understood and require further investigation. This study was conducted in a 28-year-old mature Chinese fir plantation at the Yangkou State-Owned Forest Farm, Fujian Province, China. Three thinning treatments with distinct retention densities (300, 600, and 825 stems/hm²) were established, followed by an 8-year continuous fixed-position monitoring program. We systematically analyzed the effects of varying thinning intensities on stand growth dynamics, timber structure evolution, and carbon storage response across multiple ecosystem components (tree layer, soil layer, understory vegetation, and litter layer). The results indicated that: low-retention-density treatment (300 stems/hm²) significantly increased the mean annual increments of tree height and diameter at breast height (DBH) by 18% and 8%, respectively, but significantly reduced large-diameter timber yield. The large-diameter timber yields under the three retention densities were 394.89, 635.78, and 618.1 m³/hm², respectively. With the increase of thinning intensity, tree layer carbon storage exhibited a decreasing trend, understory vegetation carbon storage initially increased and then decreased, soil carbon storage reached the maximum under the 600 stems/hm² treatment, and litter carbon storage showed a continuous increase. Total ecosystem carbon storage was higher under the 600 and 825 stems/hm² treatments (295.32 t/hm² and 294.20 t/hm², respectively) than under the 300 stems/hm² treatment (211.27 t/hm²). Comprehensive analysis revealed that a thinning retention density of 600 stems/hm² achieved both a higher large-sized timber yield and greater total ecosystem carbon storage, indicating its potential to enhance both large- diameter timber yield and ecosystem carbon sequestration. This study provides a scientific basis for establishing sustainable management models for Chinese fir plantations that effectively integrate high-quality timber production with efficient carbon sequestration services.