Light Detection and Ranging (lidar) has been widely applied to characterize the 3-dimensional (3D) structure of forests as it can generate 3Dpoint data with high spatial resolution and accuracy. Individual tree segmentations, usually derived from the canopy height model, are used to derive individual tree structural attributes such as tree height, crown diameter, canopy-based height, and others. In this study, we develop a new algorithm to segment individual trees from the small footprint discrete return airborne lidar point cloud. We experimentally applied the new algorithm to segment trees in a mixed conifer forest in the Sierra Nevada Mountains in California. The results were evaluated in terms of recall, precision, and F-score, and show that the algorithm detected 86 percent of the trees (“recall”), 94 percent of the segmented trees were correct (“precision”), and the overall F-score is 0.9. Our results indicate that the proposed algorithm has good potential in segmenting individual trees in mixed conifer stands of similar structure using small footprint, discrete return lidar data.