Carbon management in forests has become the most important agenda of the first half of the 21st century in China in the context of the mitigation of climate change impact. As the main producer of the inland river basin ecosystem in arid region of Northwest China, the desert riparian forest maintains the regional environment and also holds a great significance in regulating the regional/global carbon cycle. In this study, we estimated the total biomass, carbon storage, as well as monetary ecosystem service values of desert riparian Populus euphratica Oliv. in the lower reaches of the Tarim River based on terrestrial forest inventory data within an area of 100 ha (100 plots with sizes of 100 m × 100 m) and digitized tree data within 1000 ha (with 10 m × 10 m grid) using a statistical model of biomass estimation against tree height (TH) and diameter at breast height (DBH) data. Our results show that total estimated biomass and carbon storage of P. euphratica within the investigated area ranged from 3.00 to 4317.00 kg/ha and from 1.82 to 2158.73 kg/ha, respectively. There was a significant negative relationship (p < 0.001) between biomass productivity of these forests and distance to the river and groundwater level. Large proportions of biomass (64% of total biomass) are estimated within 200 m distance to the river where groundwater is relatively favorable for vegetation growth and biomass production. However, our data demonstrated that total biomass showed a sharp decreasing trend with increasing distance to the river; above 800 m distance, less biomass and carbon storage were estimated. The total monetary value of the ecosystem service “carbon storage” provided by P. euphratica was estimated to be $6.8 × 104 USD within the investigated area, while the average monetary value was approximately $70 USD per ha, suggesting that the riparian forest ecosystem in the Tarim River Basin should be considered a relevant regional carbon sink. The findings of this study help to establish a better understanding of the spatial distribution pattern of P. euphratica forest under water scarcity and can also provide an alternative approach to local decision-makers for efficient and precise assessment of forest carbon resources for emission reduction programs.