Development of regional policies to reduce net emissions of carbon dioxide (CO2) would benefit from the quantification of the major components of the region's carbon balance--fossil fuel CO2 emissions and net fluxes between land ecosystems and the atmosphere. Through spatially detailed inventories of fossil fuel CO2 emissions and a terrestrial biogeochemistry model, we produce the first estimate of regional carbon balance for the Northeast United States between 2001 and 2005. Our analysis reveals that the region was a net carbon source of 259 Tg C/yr over this period. Carbon sequestration by land ecosystems across the region, mainly forests, compensated for about 6% of the region's fossil fuel emissions. Actions that reduce fossil fuel CO2 emissions are key to improving the region's carbon balance. Careful management of forested lands will be required to protect their role as a net carbon sink and a provider of important ecosystem services such as water purification, erosion control, wildlife habitat and diversity, and scenic landscapes.