1. Restoration thinning involves the selective removal of stems in woody ecosystems to restore historical or ecologically desirable ecosystem structure and processes. Thinning may also accelerate carbon sequestration in dense regenerating forests. This study considers restoration thinning effects on both structural development and carbon sequestration in a regenerating forest ecosystem. 2. An experimental thinning trial was established in dense Acacia harpophylla regrowth in southern Queensland, Australia. The mean stem density prior to thinning was 17 000 stems ha22121. Four treatments (no thinning and thinning down to 1000, 2000, and 4000 stems ha22121) were applied in a randomized block design. The growth and mortality of a subset of stems were monitored for 2 years. Mixed-effects models and hierarchical Bayesian models (HBMs) were used to test for treatment effects and to explore relationships between neighborhood density variables and the growth and mortality of stems. The HBMs were subsequently used to parameterize an individual-based simulation model of stand structural development and biomass accumulation over 50 years. 3. The circumference growth rates of stems in thinning treatments were significantly higher than in the control. Woody species diversity and grass cover were also significantly higher in thinning treatments and were strongly negatively correlated with canopy cover. The HBMs confirmed that both growth and mortality were density-dependent to some extent. 4. The simulation model predicted a net gain in living above-ground biomass in some thinning treatments (compared with the control treatment) within 20 years after thinning. The 6000 stems ha22121 treatment was predicted to be the optimal thinning density for structural development towards the structure of a nearby mature reference forest. 5. Synthesis and applications. Naturally regenerating woody vegetation provides important habitat for native fauna in fragmented landscapes and represents an efficient means to reinstate habitat connectivity and increase forest area. Many regrowth ecosystems also have considerable potential as land-based carbon sinks. This study demonstrates that restoration thinning can be applied to accelerate stem growth and woody species recruitment and may also accelerate structural development and carbon sequestration in this extensive regrowth ecosystem. The application of restoration thinning to provide dual restoration and carbon benefits should be explored for a wider range of naturally regenerating woody ecosystems.