Low rates of growth for conifers at high elevations may relate to problems in acquiring or utilizing carbon. A traditional hypothesis for growth limits of trees at alpine treeline is that low photosynthesis (A) leads to insufficient supply of carbon for growth. Alternatively, the sink-limitation hypothesis questions the importance of low A, and suggests that trees at treeline have abundant carbon for growth as a result of greater decreases in carbon use [respiration (R) and growth] than A at higher elevations. Concentrations of carbon intermediates (e.g., nonstructural carbohydrates, NSC) have been used to support the sink-limitation hypothesis, with the assumption that NSC reflects the ratio of carbon source to sinks. Our objective was to determine elevation effects on carbon balance (whole-plant uptake, storage, and efflux of carbon) of tree seedlings during their critical establishment phase at timberline. Changes in A and R (of whole crowns), NSC (starches and simple sugars), and growth were measured in seedlings of a treeline (Abies lasiocarpa) and nontreeline species (Pseudotsuga menziesii). Seedlings were outplanted at the lower (2,450 m) and upper (3,000 m) edges of the timberline zone in the Rocky Mountains, USA. At the upper compared with lower elevation, both species had 10–20% less root and needle growth, 13–15% less A, 35–39% less R, and up to 50% greater NSC. A. lasiocarpa allocated more biomass to needles and had greater A but less NSC than P. menziesii. The greater effects of elevation on R compared with A led to a 1.3-fold increase in A:R at the upper elevation, and a corresponding increase in starch (r ² = 0.42)—a pattern consistent with the predictions of the sink-limitation hypothesis. Nevertheless, A and dry mass gain were positively correlated (r ² = 0.42), indicating that variation in photosynthesis was related to growth of seedlings at timberline.