This paper demonstrates the importance of the remaining urban forests, and the related policy and management issues, by reviewing the current situation in Sydney, Australia. Transport corridor vegetation surveys are used to show challenges and implications for the future. The process of medium to long-term policy formulation, with initial management strategy development at the local level, is outlined. This study also addresses the increasing need for integration with other urban issues, including the existing general urban forest strategies. The benefits of using active remote sensing technologies are illustrated by using light detection and ranging (LiDAR) data to generate a high resolution, 3-dimensional surface model. Among the major transport corridors in the Sydney metropolitan area, segments of two long-established main roads were selected for detailed studies of the roadside forest resource. Data analysis indicated that roadside trees are very diverse and distributed in a patchy way. Some areas are treeless and some have dense stands. The results also showed high variability in species composition between local areas, with canopy cover and shading varying widely. We identify a number of issues and lessons from conservation, pollution and socio-economic perspectives, which have broader applications, and relate these findings back to policies and planning.