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At present, carbon sequestration in terrestrial ecosystems slows the growth rate of atmospheric CO2 concentrations, and thereby reduces the impact of anthropogenic fossil fuel emissions on the climate system. Changes in climate and land use affect terrestrial biosphere structure and functioning at present, and will likely impact on the terrestrial carbon balance during the coming decades - potentially providing a positive feedback to the climate system due to soil carbon releases under a warmer climate. Quantifying changes, and the associated uncertainties, in regional terrestrial carbon budgets resulting from these effects is relevant for the scientific understanding of the Earth system and for long-term climate mitigation strategies. A model describing the relevant processes that govern the terrestrial carbon cycle is a necessary tool to project regional carbon budgets into the future. This study (1) provides an extensive evaluation of the parameter-based uncertainty in model results of a leading terrestrial biosphere model, the Lund-Potsdam-Jena Dynamic Global Vegetation Model (LPJ-DGVM), against a range of observations and under climate change, thereby complementing existing studies on other aspects of model uncertainty; (2) evaluates different hypotheses to explain the age-related decline in forest growth, both from theoretical and experimental evidence, and introduces the most promising hypothesis into the model; (3) demonstrates how forest statistics can be successfully integrated with process-based modelling to provide long-term constraints on regional-scale forest carbon budget estimates for a European forest case-study; and (4) elucidates the combined effects of land-use and climate changes on the present-day and future terrestrial carbon balance over Europe for four illustrative scenarios - implemented by four general circulation models - using a comprehensive description of different land-use types within the framework of LPJ-DGVM. This study presents a way to assess and reduce uncertainty in process-based terrestrial carbon estimates on a regional scale. The results of this study demonstrate that simulated present-day land-atmosphere carbon fluxes are relatively well constrained, despite considerable uncertainty in modelled net primary production. Process-based terrestrial modelling and forest statistics are successfully combined to improve model-based estimates of vegetation carbon stocks and their change over time. Application of the advanced model for 77 European provinces shows that model-based estimates of biomass development with stand age compare favourably with forest inventory-based estimates for different tree species. Driven by historic changes in climate, atmospheric CO2 concentration, forest area and wood demand between 1948 and 2000, the model predicts European-scale, present-day age structure of forests, ratio of biomass removals to increment, and vegetation carbon sequestration rates that are consistent with inventory-based estimates. Alternative scenarios of climate and land-use change in the 21<sup>st century suggest carbon sequestration in the European terrestrial biosphere during the coming decades will likely be on magnitudes relevant to climate mitigation strategies. However, the uptake rates are small in comparison to the European emissions from fossil fuel combustion, and will likely decline towards the end of the century. Uncertainty in climate change projections is a key driver for uncertainty in simulated land-atmosphere carbon fluxes and needs to be accounted for in mitigation studies of the terrestrial biosphere.