Oil palm (Elaeis guineensis Jacq.) crops are expanding rapidly in the tropics, with implications for the global carbon cycle. Little is currently known about soil organic carbon (SOC) dynamics following conversion to oil palm and virtually nothing for conversion of grassland. We measured changes in SOC stocks following conversion of tropical grassland to oil palm plantations in Papua New Guinea using a chronosequence of plantations planted over a 25-year period. We further used carbon isotopes to quantify the loss of grassland-derived and gain in oil palm-derived SOC over this period. The grassland and oil palm soils had average SOC stocks of 10.7 and 12.0 kg m−2, respectively, across all the study sites, to a depth of 1.5 m. In the 0–0.05 m depth interval, 0.79 kg m−2 of SOC was gained from oil palm inputs over 25 years and approximately the same amount of the original grass-derived SOC was lost. For the whole soil profile (0–1.5 m), 3.4 kg m−2 of SOC was gained from oil palm inputs with no significant losses of grass-derived SOC. The grass-derived SOC stocks were more resistant to decrease than SOC reported in other studies. Black carbon produced in grassfires could partially but not fully account for the persistence of the original SOC stocks. Oil palm-derived SOC accumulated more slowly where soil nitrogen contents where high. Forest soils in the same region had smaller carbon stocks than the grasslands. In the majority of cases, conversion of grassland to oil palm plantations in this region resulted in net sequestration of soil organic carbon.