The digital elevation model from the Shuttle Radar Topography Mission (SRTM) and the National Elevation Dataset (NED) have been used to estimate the forest canopy height. Most of such studies have been conducted over flat areas; the method performance has not been carefully examined over mountainous areas. This study, which is conducted over two mountainous test sites located in California and New Hampshire, reveals that the co-registration of these two digital elevation models (DEMs) is crucial to ensuring the quality of the results. The image co-registration method used in interferometric SAR processing is adapted to the co-registration of two DEMs. The forest canopy height from the Laser Vegetation Imaging Sensor (LVIS) is used as the reference data. The results showed that the misregistration between SRTM and NED was very obvious at both test sites. After the co-registration, the R² of the correlation between the height of the C-band scattering phase center derived from SRTM minus NED and the forest canopy height derived from LVIS data was improved from 0.19 to 0.51, and RMSE was reduced from 16.4 m to 6.8 m for slope up to 55° at the California test site, while the R² was improved from 0.39 to 0.57 and RMSE was reduced from 5.4 m to 3.6 m for slopes up to 45° at the New Hampshire test site. The influences of data resolution and terrain slopes were also investigated. The results showed that reducing the data resolution by spatial averaging could not reduce the influence of DEM misregistration.