Unmanned aerial vehicles (UAVs) provide a new research tool to obtain high spatial and temporal resolution imagery at a reduced cost. Rapid advances in miniature sensor technology are leading to greater potentials for ecological research. We demonstrate one of the first applications of UAV lidar and hyper-spectral imagery and a fusion method for individual plant species identification and 3D characterization at submeter scales in south-eastern Arizona, USA. The UAV lidar scanner characterized the individual vegetation canopy structure and bare ground elevation, whereas the hyperspectral sensor provided species-specific spectral signatures for the dominant and target species at our study area in leaf-on condition. We hypothesized that the fusion of the two different data sources would perform better than either data type alone in the arid and semi-arid ecosystems with sparse vegetation. The fusion approach provides 84-89% overall accuracy (kappa values of 0.80-0.86) in target species classification at the canopy scale, leveraging a wide range of target spectral responses in the hyperspectral data and a high point density (50 points/m(2)) in the lidar data. In comparison, the hyperspectral image classification alone produced 72-76% overall accuracies (kappa values of 0.70 and 0.71). The UAV lidar-derived digital elevation model (DEM) is also strongly correlated with manned airborne lidar-derived DEM (R-2 = 0.98 and 0.96), but was obtained at a lower cost. The lidar and hyperspectral data as well as the fusion method demonstrated here can be widely applied across a gradient of vegetation and topography to monitor and detect ecological changes at a local scale.