Abstract: Land-use alterations significantly influence the ecosystem landscape ecological risk and carbon sequestration potential. Mile City, a quintessential mountainous urban area, was selected for the case study. Land cover data from 2000, 2010, and 2020 were analyzed using landscape ecological risk assessment and InVEST modeling to quantitatively evaluate the spatial heterogeneity and temporal trends of landscape ecological risks and carbon storage. Socioeconomic datasets were integrated with tools such as PLUS, SPSS, and GeoDa to simulate and analyze the correlations between landscape ecological risks and carbon storage variations across different time periods. The findings revealed the following: 1) The landscape ecological risk levels in the study area escalated from 2000 to 2020, with the northern region predominantly characterized by low- to medium-risk zones, while the southern region is predominantly high-to extremely high-risk zones, with an increasing area aggregating towards the northeast and southeast. 2) Over the 20-year period, Mile City’s carbon sequestration services exhibited a gradient of higher values in the northern and eastern regions and lower values in the northwestern and central regions, with a decline in overall carbon storage and the economic value of carbon sequestration. 3) Except for the cropland protection scenario, the carbon storage and economic value of carbon sequestration in the other scenarios showed an upward trend, with the ecological protection scenario showing a significant increase. The cropland protection scenario had the largest area of degradation in the landscape ecological risk levels. 4) From 2000 to 2010, there was a significant negative correlation between landscape ecological risk and carbon storage in terms of both quantity and spatial distribution. This correlation was found to be positive between 2010 and 2020. Under various development scenarios, spatial agglomeration patterns are primarily characterized by clusters of high-risk-low-carbon storage and low-risk-high-carbon storage distributed in the northern and central regions. This study suggests that regional landscape ecological risks negatively affect the carbon sequestration services. Future efforts should focus on eastern forest areas that are at high risk of carbon storage potential. Targeted ecological protection and management strategies should be developed to ensure ecosystems provide sustainable carbon sequestration services and mitigate risks during economic growth.