Light detection and ranging (LiDAR) data can provide detailed information about three-dimensional forest horizontal and vertical structure that is important to forest productivity and wildlife habitat. Indeed, LiDAR data have been shown to provide accurate estimates to forest structural parameters and measures of higher trophic levels (e.g., avian abundance and diversity). However, links between forest structure and tree function have not been evaluated using LiDAR. This study was designed and scaled to assess the relationship of LiDAR to multiple aspects of forest structure and higher trophic levels (arthropod and bird populations), which included the ground-based collection of percent crown and understory closure, as well as arthropod and avian abundance and diversity data. Additional plot-based measures were added to assess the relationship of LiDAR to forest health and productivity. High-resolution discrete-return LiDAR data (flown summer of 2009) were acquired for the Hubbard Brook Experimental Forest (HBEF) in New Hampshire, USA. LiDAR data were classified into four canopy structural categories: 1) high crown and high understory closure, 2) high crown and low understory closure, 3) low crown and high understory closure, and 4) low crown and low understory closure. Nearby plots from each of the four LiDAR categories were grouped into "blocks" to assess the spatial consistency of data. Ground-based measures of forest canopy structure, site, stand and individual tree measures were collected on nine 50 m-plots from each LiDAR category (36 plots total), during summer of 2012. Analysis of variance was used to assess the relationships between LiDAR and a suite of tree function measures. Our results show the novel ability of LiDAR to assess forest health and productivity at the stand and individual tree level. We found significant correspondence between LiDAR categories and our ground-based measures of tree function, including xylem increment growth, foliar nutrition, crown health, and stand mortality. Furthermore, we found consistent reductions in xylem increment growth, decreases in foliar nutrition and crown health, and increases in stand mortality related to high understory closure. This suggests that LiDAR measures can reflect competitive interactions, not just among overstory trees for light, but also interactions between overstory trees and understory vegetation for resources other than light (e.g., nutrients). High-resolution LiDAR data show promise in the assessment of forest health and productivity related to tree function.