Aim We assessed how avian biodiversity and above-ground carbon storage were related in different forest age-classes, including mature stands (> 100 years), in a managed, mixed-species eucalypt forest. Location Gippsland, south-eastern Australia. Methods In 50 2-ha stands ranging in age from ≤ 5 years to mature stands > 100 years, we undertook repeated avian surveys, performed detailed habitat measurements and estimated amounts of above-ground carbon. Extensive wildfire reduced the number of sites to 28 (seven in each of four age classes) upon which analyses and inferences were made. We also analysed data on carbon storage and some bird responses from previously published studies. Results Mature vegetation (> 100 years) had the greatest richness, abundance and biomass of birds. Key ecological resources, such as tree-hollows for nesting, generally occurred mostly in stands > 60 years. Avian richness per unit of above-ground carbon storage was relatively low for stands of 20–60 years. While above-ground carbon storage appeared to increase in a monotonic fashion as stands age and mature, there were quantum increases in all measures of avian biodiversity in mature stands (> 100 years). Main conclusions Our results suggest that carbon is organized in a different way, with substantially greater biodiversity benefits, in very old stands. Mature vegetation simultaneously maximizes both avian biodiversity and above-ground carbon storage. These results bolster arguments for allocating highest priorities to the preservation of old-growth forest stands rather than alternative investments (e.g. reafforestation for carbon sequestration).