Magada Natural Forest is one of the greatest lungs of the earth and is characterized by dense, wide, and abode of diverse vegetation composition in southern Ethiopia. After 2002, the areal coverage of the forest is decreasing significantly from time to time. The purpose of this study is to analyze vegetation cover and the carbon sequestration potential of the Magada Natural forest. The main objective of the study is to detect the spatial forest cover change of the Magada natural forest, identify possible deriving factors of vegetation change of the Magada Natural Forest, quantify the carbon sequestration potential of the Magada Natural Forest, assess the trend of forest Carbon Cover with Carbon Sequestration Potential of the Magada Natural Forest, and produce carbon sequestration potential map of the Magada Natural Forest. The research design employed for this research was rend analysis research design. It is designed to examine the phenomena change over time starting from one point of time in the past until the present. Information on Land Use Land Cover Changes that happened from 1972 to 2017 was analyzed using ERDAS IMAGINE 2015, and Arc map 10.5 software. Four sets of remotely sensed data, Land sat-3 MSS (1972), Land sat-5 TM (1987) and Land sat-7 ETM+ (2002) and Land sat-8 ETM –OLI (2017) with a time span of 45 years; soil samples, litter samples, and tree DBHs were used. Four LULCs namely farmlands and settlements, dense forest, sparse forest, and grasslands, were identified. Farmland-settlements and sparse forest are alarmingly increased, while dense forest land-use type showed decreased trends under different time steps. Moreover, the Magada Natural Forest has stocked 4,431.57 carbon t/ha in 2017.