The paper investigated the possible gains in using low density (average 1 pulse/m2
) full-waveform (FWF) airborne laser scanning (ALS) data for individual tree detection and tree species classification and compared the results to the ones obtained using discrete return laser scanning. The aim is to approach a low-cost, fully ALS-based operative forest inventory method that is capable of providing species-specific diameter distributions required for wood procurement. The point data derived from waveform data were used for individual tree detection (ITD). Features extracted from segmented tree objects were used in random forest classification by which both feature selection and classification were performed. Experiments were conducted with 5532 ground measured trees from 292 sample plots and using FWF data collected with Leica ALS60 scanner over a boreal forest, mainly consisting of pine, spruce and birch, in southern Finland. For the comparisons, system produced multi-echo discrete laser data (DSC) were also analyzed with the same procedures. The detection rate of individual trees was slightly higher using FWF point data than DSC point data. Overall detection accuracy, however, was similar because commission error was increased when omission error was decreasing. The best overall classification accuracy was 73.4% which contains an 11 percentage points increase when FWF features were included in the classification compared with DSC features alone. The results suggest that FWF ALS data contains more information about the structure and physical properties of the environment that can be used in tree species classification of pine, spruce and birch when comparing with DSC ALS data.