The importance of mangrove forests in carbon sequestration and coastal protection has been widely acknowledged. Large-scale damage of these forests, caused by hurricanes or clear felling, can enhance vulnerability to erosion, subsidence and rapid carbon losses. However, it is unclear how small-scale logging might impact on mangrove functions and services. We experimentally investigated the impact of small-scale tree removal on surface elevation and carbon dynamics in a mangrove forest at Gazi bay, Kenya. The trees in five plots of a Rhizophora mucronata (Lam.) forest were first girdled and then cut. Another set of five plots at the same site served as controls. Treatment induced significant, rapid subsidence (−32.1±8.4 mm yr−1 compared with surface elevation changes of +4.2±1.4 mm yr−1 in controls). Subsidence in treated plots was likely due to collapse and decomposition of dying roots and sediment compaction as evidenced from increased sediment bulk density. Sediment effluxes of CO2 and CH4 increased significantly, especially their heterotrophic component, suggesting enhanced organic matter decomposition. Estimates of total excess fluxes from treated compared with control plots were 25.3±7.4 tCO2 ha−1 yr−1 (using surface carbon efflux) and 35.6±76.9 tCO2 ha−1 yr−1 (using surface elevation losses and sediment properties). Whilst such losses might not be permanent (provided cut areas recover), observed rapid subsidence and enhanced decomposition of soil sediment organic matter caused by small-scale harvesting offers important lessons for mangrove management. In particular mangrove managers need to carefully consider the trade-offs between extracting mangrove wood and losing other mangrove services, particularly shoreline stabilization, coastal protection and carbon storage.