Agroforestry has been recognized by the Intergovernmental Panel on Climate Change (IPCC) as important for reducing soil erosion and carbon sequestration. The Indian Eastern Himalayan region is very diverse in terms of agroforestry systems varying in species composition and management practices according to agro-climatic zones as well as inherent traditional knowledge of the practising communities. This land use system forms an important part of the traditional agricultural practices of Indigenous communities of this region by supporting their livelihood and also deeply embedded in their socio-cultural traditions. The present review is an attempt to appraise the different agroforestry systems of the eastern Himalayan region of India, with a particular focus on their role in carbon sequestration and the provision of ecosystem services. Analysis of the literature revealed the multifarious types of ecosystem services that can be derived from this land use system ranging from provisioning, regulating and cultural services. Moreover, the potential for carbon sequestration was reported by several researchers and was found to vary concerning species composition and type of management. Despite its importance, agroforestry systems also face several challenges due to various factors including lack of quality planting material, market linkages, knowledge gap, and policy complications as well as the impacts of climate change. In conclusion, we highlighted several opportunities for sustainable agroforestry practices by promoting them as biodiversity conservation models, encouraging participation of agroforestry practitioners in carbon credit markets, linking farmers with agricultural extension services and integrating communities’ traditional knowledge with scientific innovation for improved seed, effective soil and water management, and sustainable harvesting, value addition and marketing of agroforestry products.