Data from Optech Titan are analyzed here for purposes of terrain classification, adding the spectral data component to the lidar point cloud analysis. Nearest-neighbor sorting techniques are used to create the merged point cloud from the three channels. The merged point cloud is analyzed using spectral analysis techniques that allow for the exploitation of color, derived spectral products (pseudo-NDVI), as well as lidar features such as height values, and return number. Standard spectral image classification techniques are used to train a classifier, and analysis was done with a Maximum Likelihood supervised classification. Terrain classification results show an overall accuracy improvement of 10% and a kappa coefficient increase of 0.07 over a raster-based approach.