A comprehensive canopy characterization of forests is derived from the combined remote sensing signal of imaging spectrometry and large footprint LIDAR. The inversion of two linked physically based Radiative Transfer Models (RTM) provided the platform for synergistically exploiting the specific and independent information dimensions obtained by the two earth observation systems. Due to its measurement principle, LIght Detection And Ranging (LIDAR) is particularly suited to assess the horizontal and vertical canopy structure of forests, while the spectral measurements of imaging spectrometry are specifically rich on information for biophysical and -chemical canopy properties. In the presented approach, the specific information content inherent to the observations of the respective sensor was not only able to complement the canopy characterization, but also helped to solve the ill-posed problem of the RTM inversion. The theoretical feasibility of the proposed earth observation concept has been tested on a synthetic data set generated by a forest growth model for a wide range of forest stands. Robust estimates on forest canopy characteristics were achieved, ranging from maximal tree height, fractional cover (fcover), Leaf Area Index (LAI) to the foliage chlorophyll and water content. The introduction of prior information on the canopy structure derived from large footprint LIDAR observations significantly improved the retrieval performance relative to estimates based solely on spectral information.