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Abstract: Airborne Lidar (Light detection and ranging) is an efficient tool for the generation of Digital Terrain Models (DTMs). Although many studies have been conducted in generating DTMs using Lidar data, it is still a challenging research area. The difficulty in filtering large buildings as well as a diversity of urban features makes the design of urban DTM generating methods an ongoing priority. This research adopted an upward-fusion methodology to generate urban DTMs using airborne Lidar data. Firstly, several preliminary DTMs of different resolutions were obtained using a local minimum method. Next, upward fusion was conducted between these DTMs. This process began with the DTM of the largest grid size, which was treated as a trend surface. A finer DTM was compared with this large scale DTM. By setting appropriate thresholds, a new DTM was achieved by selecting qualified elevation values from the finer DTM and retaining the value of the trend surface when the value from the finer DTM was beyond the threshold. This process continued iteratively until all preliminary DTMs had been included in the upward fusion and a refined DTM of high resolution was achieved. To further reduce possible errors in the resulting DTM, an extended local minimum method was proposed for filtering outliers and generating preliminary DTMs. A case study was carried out in the city of Cambridge, which represents an urban landscape with a variety of building forms, street patterns and vegetation structures. The time efficiency, results of the accuracy assessments and comparison with leading software proved the success of the case study and indicated that upward-fusion was an effective method for the generation of urban DTMs with airborne Lidar data and could improve the accuracy of other DTM generating algorithms. This paper also proposed possible approaches for further improvements on this methodology. [Copyright &y& Elsevier]