Worldwide, forests have absorbed around 30% of global anthropogenic emissions of carbon dioxide (CO₂) annually, thereby acting as important carbon (C) sinks. It is proposed that leaving large fragments of dead wood, coarse woody debris (CWD), in forest ecosystems may contribute to the forest C sink strength. CWD may take years to centuries to degrade completely, and non-respired C from CWD may enter the forest soil directly or in the form of dissolved organic C. Although aboveground decomposition of CWD has been studied frequently, little is known about the relative size, composition and fate of different C fluxes from CWD to soils under various substrate-specific and environmental conditions. Thus, the exact contribution of C from CWD to C sequestration within forest soils is poorly understood and quantified, although understanding CWD degradation and stabilization processes is essential for effective forest C sink management. This review aims at providing insight into these processes on the interface of forest ecology and soil science, and identifies knowledge gaps that are critical to our understanding of the effects of CWD on the forest soil C sink. It may be seen as a “call-to-action” crossing disciplinary boundaries, which proposes the use of compound-specific analytical studies and manipulation studies to elucidate C fluxes from CWD. Carbon fluxes from decaying CWD can vary considerably due to interspecific and intraspecific differences in composition and different environmental conditions. These variations in C fluxes need to be studied in detail and related to recent advances in soil C sequestration research. Outcomes of this review show that the presence of CWD may enhance the abundance and diversity of the microbial community and constitute additional fluxes of C into the mineral soil by augmented leaching of dissolved organic carbon (DOC). Leached DOC and residues from organic matter (OM) from later decay stages have been shown to be relatively enriched in complex and microbial-derived compounds, which may also be true for CWD-derived OM. Emerging knowledge on soil C stabilization indicates that such complex compounds may be sorbed preferentially to the mineral soil. Moreover, increased abundance and diversity of decomposer organisms may increase the amount of substrate C being diverted into microbial biomass, which may contribute to stable C pools in the forest soil.