This paper gives an expatiation on significance and specific requirements of developing afforestation and reforestation project under CDM in Kyoto Protocol. According to the international rules and the current forestry development situation in China, the priority area for CDM afforestation and reforestation (CDM A/R) project is finally found after scientific selection and assessment on indicators, including the non-forestland area in 1990, growth rate of tree, afforestation cost, biodiversity and community development. The outcome from the study provides a solid basis for finding and implementing CDM A/R carbon sequestration projects in China. The study also puts forward suggestions on the strategy to develop and manage CDM A/R projects in China This paper gives an expatiation on significance and specific requirements of developing afforestation and reforestation project under CDM in Kyoto Protocol. According to the international rules and the current forestry development situation in China, the priority area for CDM afforestation and reforestation (CDM A / R) project is finally found after scientific selection and assessment on indicators, including the non-forestland area in 1990, growth rate of tree, afforestation cost, biodiversity and community development. The outcome from the study provides a solid basis for finding and implementing CDM A / R carbon sequestration projects in China. The study also puts forward suggestions on the strategy to develop and manage CDM A / R projects in China