Grazing in outlying fields has a long history and is important in local communities worldwide. During the last few decades, grazing pressure has both decreased and increased in alpine ecosystems, but little is known about the effects on soil carbon storage. As part of a sheep grazing experiment with three sheep stocking rates of no sheep (control), 25 and 80 sheep km−2, we tested effects of grazing on soil organic carbon storage, the form of soil organic matter (SOM) and its lability (potential carbon mineralization) in organic horizons of low-alpine grasslands in southern Norway. After 7 years of grazing, the greatest sheep density reduced soil organic carbon concentration (% SOC) and carbon stocks at equivalent soil mass as compared with the control. In contrast, the low stocking rate caused no change or a slight increase. The form of SOM, expressed as ratios of particulate organic carbon to soil organic carbon, was only slightly affected by grazing, with a small decrease and moderate increase at the greater and smaller stocking rate, respectively. The lability of SOM was not affected by grazing directly, but was significantly related to the mineral content of the O-horizons. In general, there were large differences between the plant communities of snowbed and willow-shrub for several soil attributes. We concluded that 7 years of grazing had limited impacts on stocks, form and lability of SOM.