Peat-forming large-tussock grasslands on oceanic and sub-Antarctic islands are fundamentally understudied in terms of carbon (C) storage. Here, we quantify both plant and soil C and nitrogen (N) storage for the large tussock grass Poa flabellata in the Falkland Islands, at its most northerly range. In this study, we adopt a spatially explicit sampling approach to accounting for tussock and inter-tussock (between tussocks) areas for three habitats; remnant stands (surviving clearance and overgrazing), restored stands (planted) and eroded bare peat sites. We found that remnant stands of P. flabellata have above-ground C densities of 49.8 ± 9.7 Mg C ha−1, equivalent to temperate and boreal forests. The majority of above-ground C is stored within the pedestal, a compact accumulation of dead leaves, rhizomes and roots. By surveying restored stands of increasing age we found that such C accrual may take longer than two decades. Soil C stocks were horizontally and vertically spatially variable and did not differ between habitat types. Plant and soil C and N stocks were strongly coupled identifying the important role of N availability for C accrual in this system. Scaling-up our results, planting tussock grass could accrue up to 0.9 million Mg C on a decadal timescale across the islands, yet the impact of replanting on soil C storage is likely to be more variable. Our results highlight the local and regional importance of large tussock grasslands as dense C stores and that land management and conservation of these communities needs to be more carbon-conscious.