Unman aerial vehicle (UAV) LiDAR has been widely used in the field of forestry. Individual tree extraction is a key step for forest inventory. Although many individual tree extraction methods have been proposed, the individual tree extraction accuracy is still low due to the complex forest environments. Moreover, many parameters in these methods generally need to be set. Thus, the degree of automation of the methods is generally low. To solve these problems, this paper proposed an automatic mean shift segmentation method, in which the kernel bandwidths can be calculated self-adaptively. Meanwhile, a hierarchy mean shift segmentation technique was proposed to extract individual tree gradually. A plot-level UAV LiDAR tree dataset was adopted for testing the performance of the proposed method. Experimental results showed that the proposed method can achieve better individual tree extraction result without any parameter setting. Compared with the traditional mean shift segmentation method, both the completeness and mean accuracy of the proposed method are higher.