High density airborne LiDAR, for example FLI-MAP 400 data, has opened an opportunity for individual tree measurement. This paper presents a method for individual tree delineation and undergrowth vegetation removal in forest area. The delineation of individual trees involves two steps namely 1) tree crown delineation based on density of high points (DHP) and 2) separation of dominant trees and undergrowth vegetation. The DHP method relies on the fact that the density of received laser pulses above a certain height is high at the centre of a tree crown and decreases towards the edge of the crown. In the second step, a special tree filtering algorithm is introduced to remove undergrowth vegetation, which is necessary to ease for instance the measurement of tree diameter at breast height (DBH). Two study sites are selected and the tree delineation method is tested under different tree conditions. It is shown that the method has successfully delineated more than 60% trees. However it failed to delineate the trees in two cases 1) undergrowth vegetation is very near to the dominant trees and it is even hard to separate it manually, or 2) the LiDAR data failed to reflect the complete structure of a dominant tree due to forest interception.