A decomposition scheme was applied to ALOS/PALSAR data obtained from a fast-growing tree plantation in Sumatra, Indonesia to extract tree stem information and then estimate the forest stand volume. The scattering power decomposition of the polarimetric SAR data was performed both with and without a rotation matrix and compared to the following field-measured forest biometric parameters: tree diameter, tree height and stand volume. The analytical results involving the rotation matrix correlated better than those without the rotation matrix even for natural scattering surfaces within the forests. Our primary finding was that all of the decomposition powers from the rotated matrix correlated significantly to the forest biometric parameters when divided by the total power. The surface scattering ratio of the total power markedly decreased with the forest growth, whereas the canopy and double-bounce scattering ratios increased. The observations of the OPEN ACCESS Remote Sens. 2012, 4 3059 decomposition powers were consistent with the tree growth characteristics. Consequently, we found a significant logarithmic relationship between the decomposition powers and the forest biometric parameters that can potentially be used to estimate the forest stand volume.