The Grain-for-Green Project (GFGP), one of the largest ecological restoration projects in China, has made a significant contribution to carbon neutrality. However, the quantitative contribution to climate change and the driving forces of the carbon sequestration of retired farmlands remains unclear. To analyze the carbon dynamics of the retired farmlands and their driving forces, GlobeLand30 databases were used to identify retired farmlands from 2001 to 2020; in addition, net primary productivity (NPP) of the identified lands was estimated with the Carnegie–Ames–Stanford Approach (CASA). Results showed that 131,298 km² of farmlands were retired from 2001 to 2010 (L01–10), and 130,225 km² were retired from 2011 to 2020 (L11–20). The largest areas of retired farmlands were South Central China (24%) in L01–10 and Northwest China (22%) in L11–20. The annual NPP increment of retired farmlands was the highest and most significant in Southwest China (26,455–28,783 GgC·year⁻¹ for retired farmlands in L01–10 and 21,320–23,303 GgC·year⁻¹ in L11–20). In this study, NPP had significantly positive correlations with temperature and precipitation as well as significant constraint relationships with rural population density and animal husbandry output value. The findings could provide suggestions for the further implementation of the GFGP and other restoration projects.