SAR imaging of underfoliage targets has to face a complex mixture of diverse scattering mechanisms. To characterize this complex scattering environment, nonparametric tomographic estimators are more robust to focusing artefacts but limited in resolution. Parametric tomographic estimators provide better vertical resolution but fail to adequately characterize continuously distributed volumetric scatterers such as forest canopies. To overcome these limitations, this paper addresses a new wavelet-based approach for 3D characterization of underfoliage targets. The effectiveness of this new approach is demonstrated by using L-band Multi-Baseline PolInSAR Data over Dornstetten, Germany.