Savanna is a unique vegetation type that predominantly occurs in dry-hot valleys, yet its carbon storage capacity and net primary productivity (NPP) remain poorly understood. In the present study, we estimated carbon storage and NPP of savanna vegetation using permanent field plots in the dry-hot valley of Yuanjiang, Yunnan Province, southwestern China. We estimated tree carbon storage using allometric equations, and carbon storage in shrubs and herbs was estimated by the harvesting method. The NPP was calculated using two years of data from plot surveys. We found that the total carbon storage of the savanna in Yuanjiang was 32.13 t C/hm². Carbon storage in the tree, shrub, and herb layers was 26.70 t C/hm², 4.04 t C/hm², and 1.40 t C/hm², which contributed 83.02%, 12.57%, and 4.35% of the total carbon storage, respectively. Aboveground carbon storage accounts for 66.70% of tree layer carbon storage. Similarly, the NPP of the savanna was 3.88 t C hm^-2 a^-1. NPP from the forest biomass and litter was 1.90 t C hm^-2 a^-1 and 1.98 t C hm^-2 a^-1, respectively. The contribution to the NPP of forest biomass from the understory (shrubs and herbs) approached 46.92%. Thus, we conclude that, owing to its high carbon storage and NPP values, savanna vegetation is an important component of the carbon cycle; this finding provides a rationale for the conservation of vegetation and the sustainable management of savanna ecosystems in dry-hot valleys.