In recent decades, rapid economic growth and urbanization have driven significant livelihood transitions in rural China, which raised diverse climate and environmental impacts. This study investigated the impacts of such livelihood transitions on rural households’ carbon footprint at the Three Gorges Reservoir area in West China during the period of 1978–2016. By random sampling surveys, a total of 422 households were interviewed in September 2016 and March 2017. Our results show that: 1) The vast majority of households shifted their livelihood strategies from pure agriculture to industry and/or commerce. 2) Household incomes generally became more diverse and were increasingly generated from non-agricultural sectors. 3) Changes of the carbon footprint of the surveyed households indicated a significant transformation from net carbon emission (1494.789 tons) in 1978 to net carbon sequestration (2631.85 tons) in 2016, which was contributed mainly by general shifts of rural livelihood styles and government policies (e.g. the Grain for Green policy). Accordingly, to promote a low-carbon rural development at the study area and possibly beyond, we suggest political strategies to encourage voluntary and flexible farmland utilization, promote capital investments in agriculture mechanization, improve rural infrastructures, upscaling agricultural technical training, and continue and specialize the “Grain for Green” policy at suitable locations.