The international mechanism for Reducing Greenhouse Gas Emissions from Deforestation and Forest Degradation (REDD) supposedly offers new opportunities for combining climate mitigation, conservation of the environment, and socio-economic development for development countries. In Laos REDD is abundantly promoted by the government and development agencies as a potential option for rural development. Yet, basic information for carbon management is missing: to date no knowledge is available at the national level on the quantities of carbon stored in the Lao landscapes. In this study we present an approach for spatial assessment of vegetation-based carbon stocks. We used Google Earth, Landsat and MODIS satellite imagery and refined the official national land cover data to assess carbon stocks. Our study showed that more than half (52%) of carbon stock of Laos is stored in natural forests, but that 70% of this stock is located outside of national protected areas. On the basis of two carbon-centered land use scenarios we calculated that between 30 and 40 million tons of carbon could be accumulated in shifting cultivation areas; this is less than 3% of the existing total stock. Our study suggests that the main focus of REDD in Laos should be on the conservation of existing carbon stocks, giving highest priority to the prevention of deforestation outside of national protected areas.