Terrestrial laser scanners find rapidly growing interest in photogrammetry as efficient tools for fast and reliable three‐dimensional (3D) point cloud data acquisition. They have opened a wide range of application fields within a short period of time. Beyond interactive measurement in 3D point clouds, techniques for the automatic detection of objects and the determination of geometric parameters form a high priority research issue. With the quality of 3D point clouds generated by laser scanners and the automation potential in data processing, terrestrial laser scanning is also becoming a useful tool for forest inventory. This paper presents a brief review of current laser scanner systems from a technological point of view and discusses different scanner technologies and system parameters regarding their suitability for forestry applications. Methods for the automatic detection of trees in terrestrial laser scanner data as well as the automatic determination of diameter at breast height (DBH), tree height and 3D stem profiles are outlined. Reliability and precision of the techniques are analysed on the basis of several pilot studies. In these pilot studies more than 97% of the trees could be detected correctly, and DBH could be determined with a precision of about 1.8 cm.