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Data pits commonly appear in lidar-derived canopy height models (CHMs) owing to the penetration ability of airborne light detection and ranging (lidar) into tree crowns. They have a seriously negative effect on the quality of tree detection and subsequent biophysical measurements. In this study, we propose an algorithm based on robust locally weighted regression and robust z-scores for the construction of a pit-free CHM. A significant advantage of the new algorithm is that it is parameter free, which makes it efficient and robust for practical applications. Simulated and airborne lidar-derived data sets are employed to assess the performance of the new method for CHM construction, and its results are compared to those of three classical methods, namely the natural neighbor (NN) interpolation of the highest point method (HPM), mean filter, and median filter. The results from the simulated data set demonstrate that our algorithm is more accurate compared to the three classical methods for generating pit-free CHMs in the presence of data pits. CHM construction using the lidar-derived data set shows that, compared to the classical methods, the new method has a better ability to remove data pits as well as preserving the edges, shapes, and structures of canopy gaps and crowns. Moreover, the proposed method performs better compared to the classical methods in deriving plot-level maximum tree heights from CHMs. Thus, the new method shows high potential for pit-free CHM construction.