Individual tree crown delineation in tropical forests is of great interest for ecological applications. In this paper we propose a method for hyperspectral image segmentation based on binary tree partitioning. The initial partition is obtained from a watershed transformation in order to make the method computationally more efficient. Then we use a non-parametric region model based on histograms to characterize the regions and the diffusion distance to define the region merging order. The pruning strategy is based on the discontinuity of size increment observed when iteratively merging the regions. The segmentation quality is assessed visually and appears to perform well on most cases, but tree delineation could be improved by including structural information derived from LiDAR data. © 2012 IEEE.