The dynamics of soil organic carbon (SOC) in tropical forests play an important role in the global carbon (C) cycle. Past attempts to quantify the net C exchange with the atmosphere in regional and global budgets do not systematically account for dynamic feedbacks among linked hydrological, geomorphological, and biogeochemical processes, which control the fate of SOC. Here we quantify effects of geomorphic perturbations on SOC oxidation and accumulation in two adjacent wet tropical forest watersheds underlain by contrasting lithology (volcaniclastic rock and quartz diorite) in the Luquillo Critical Zone Observatory. This study uses the spatially explicit and physically based model of SOC dynamics tRIBS-ECO (Triangulated Irregular Network-based Real-time Integrated Basin Simulator-Erosion and Carbon Oxidation) and measurements of SOC profiles and oxidation rates. Our results suggest that hillslope erosion at the two watersheds may drive C sequestration or CO2 release to the atmosphere, depending on the forest type and land use. The net erosion-induced C exchange with the atmosphere was controlled by the spatial distribution of forest types. The two watersheds were characterized by significant erosion and dynamic replacement of upland SOC stocks. Results suggest that the landscape underlain by volcaniclastic rock has reached a state close to geomorphic equilibrium, and the landscape underlain by quartz diorite is characterized by greater rates of denudation. These findings highlight the importance of the spatially explicit and physical representation of C erosion driven by local variation in lithological and geomorphological characteristics and in forest cover.