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Quantifying the 3-D forest canopy structure and leaf area index of an individual tree or a forest stand is challenging. The canopy structural information implicitly contained within point cloud data (PCD) generated from terrestrial laser scanning (TLS) makes it possible to characterize directly the spatial distribution of foliage elements. In this paper, a new voxel-based method titled “point cloud slicing” is presented to retrieve the biophysical characteristics of the forest canopy including extinction coefficient, gap fraction, overlapping effect, and effective leaf area (ELA) from PCD. These extractions were performed not only from the whole canopy but also from layers of the canopy to depict the distribution patterns of foliage elements within the canopy. The results showed that the TLS-based ELA estimation method could explain 88.7% (rmse = 0.007, p <; 0.001, and n = 30) variation of the destructive-sample-based leaf area measurement results. It was found that the sampling resolution was a key parameter in defining the dimension of a single voxel. Furthermore, the TLS-based method can also serve as a calibration tool for airborne laser scanning application with ground sampling.