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Coastal forested wetlands provide important ecosystem services along the southeastern region of the United States, but are threatened by anthropogenic and natural disturbances. Here, we examined the species composition, mortality, aboveground biomass, and carbon content of vegetation and soils in natural pine forests of the lower coastal plain in eastern North Carolina, USA. We compared a forest clearly in decline (termed “ghost forest”) adjacent to a roadside canal that had been installed as drainage for a road next to an adjacent forest subject to “natural” hydrology, unaltered by human modification (termed “healthy forest”). We also assessed how soil organic carbon (SOC) accumulation changed over time using 14C radiocarbon dating of wood sampled at different depths within the peat profile. Our results showed that the ghost forest had a higher tree density at 687 trees ha−1, and was dominated by swamp bays (Persea palustric), compared to the healthy forest, which had 265 trees ha−1 dominated by pond pine (Pinus serotina Michx). Overstory tree mortality of the ghost forest was nearly ten times greater than the healthy forest (p < 0.05), which actually contributed to higher total aboveground biomass (55.9 ± 12.6 Mg C ha−1 vs. 27.9 ± 8.7 Mg ha−1 in healthy forest), as the dead standing tree biomass (snags) added to that of an encroaching woody shrub layer during ecosystem transition. Therefore, the total aboveground C content of the ghost forest, 33.98 ± 14.8 Mg C ha−1, was higher than the healthy forest, 24.7 ± 5.2 Mg C ha−1 (p < 0.05). The total SOC stock down to a 2.3 m depth in the ghost forest was 824.1 ± 46.2 Mg C ha−1, while that of the healthy forest was 749.0 ± 170.5 Mg C ha−1 (p > 0.05). Carbon dating of organic sediments indicated that, as the sample age approaches modern times (surface layer year 2015), the organic soil accumulation rate (1.11 to 1.13 mm year−1) is unable to keep pace with the estimated rate of recent sea level rise (2.1 to 2.4 mm year−1), suggesting a causative relationship with the ecosystem transition occurring at the site. Increasing hydrologic stress over recent decades appears to have been a major driver of ecosystem transition, that is, ghost forest formation and woody shrub encroachment, as indicated by the far higher overstory tree mortality adjacent to the drainage ditch, which allows the inland propagation of hydrologic/salinity forcing due to SLR and extreme storms. Our study documents C accumulation in a coastal wetland over the past two millennia, which is now threatened due to the recent increase in the rate of SLR exceeding the natural peat accumulation rate, causing an ecosystem transition with unknown consequences for the stored C; however, much of it will eventually be returned to the atmosphere. More studies are needed to determine the causes and consequences of coastal ecosystem transition to inform the modeling of future coastal wetland responses to environmental change and the estimation of regional terrestrial C stocks and flux.