Management practices markedly impact carbon (C) cycling in forest plantations. However, the interactive effects of understory management and fertilization on soil greenhouse gas (GHG) fluxes and labile organic C pools remain unclear in forest plantations. To investigate the effects of understory replacement, fertilization, and their interaction on soil GHG fluxes and labile organic C pools in a Chinese chestnut plantation, we conducted a 2 × 2 factorial experiment over a 12-month field study with four treatments: Control (understory removed without understory replacement or fertilization), understory replacement (understory removed and seeded with Medicago sativa L., MS), fertilization (F), and MS + F. The GHG fluxes were determined using a static chamber/GC technique. The seasonal pattern of GHG fluxes did not change in any of the treatments in this one-year study; however, soil GHG fluxes, total global warming potential (GWP) of GHG fluxes, and soil organic C (SOC), water soluble organic C (WSOC), microbial biomass C (MBC), and NO3−-N concentrations were significantly affected by MS, F, and their interaction. In addition, GHG fluxes, GWP, and SOC, WSOC, MBC and NO3−-N concentrations were markedly increased by fertilization, regardless of the understory replacement treatment (P < 0.05), but they were increased by understory replacement only in the fertilized plots. The GHG fluxes were correlated with soil temperature and WSOC in all plots (P < 0.05), but not with soil moisture and MBC. These findings suggest that understory replacement likely is the optimum management technique for reducing/minimizing GHG fluxes, while F can enhance the effects of MS on increasing soil organic C and nutrient availability. We conclude that a combination of a moderate rate of fertilization and understory replacement with legume species should be adopted to increase soil C sequestration, maintain soil fertility and sustainably develop chestnut plantations.