Tidal freshwater forested wetlands (TFFW) provide critical ecosystem services including essential habitat for a variety of wildlife species and significant carbon sinks for atmospheric carbon dioxide. However, large uncertainties remain concerning the impacts of climate change on the magnitude and variability of carbon fluxes and storage across a range of TFFW. In this study, we developed a process-driven Tidal Freshwater Wetlands DeNitrification-DeComposition model (TFW-DNDC) that has integrated new features, such as soil salinity effects on plant productivity and soil organic matter decomposition to explore carbon dynamics in TFFW in response to drought-induced saltwater intrusion. Eight sites along the floodplains of the Waccamaw River (USA) and the Savannah River (USA) were selected to represent TFFW transition from healthy to moderately and highly salt-impacted forests, and eventually to oligohaline marshes. TFW-DNDC was calibrated and validated using field observed annual litterfall, stem growth, root growth, soil heterotrophic respiration and soil organic carbon storage. Analyses indicate that plant productivity and soil carbon sequestration in TFFW could change substantially in response to increased soil porewater salinity and reduced soil water table due to drought, but in interactive ways dependent on the river simulated. Such responses are variable due to non-linear relationships between carbon cycling processes and environmental drivers. Plant productivity, plant respiration, soil organic carbon sequestration rate and storage in the highly salt-impacted forest sites decreased significantly under drought conditions compared to normal conditions. Considering the high likelihood of healthy and moderately salt-impacted forests becoming highly salt-impacted forests under future climate change and sea-level rise, it is very likely that TFFW will lose their capacity as carbon sinks without up-slope migration.