Satellite based remote sensing supported by air photo and field surveys, provide a means to area covering forest health assessment on a regional scale. Landsat TM data has been extensively used in studies of spruce and fir defoliation in Europe and North America. The temporal coverage of Landsat TM in combination with cloudiness however restrict the availability of data. In this study the LISS-3 sensor onboard the Indian Resource Satellite, IRS-1C, was evaluated for defoliation assessments in Norway spruce (Picea abies) in the central part of Sweden. The near infrared wavelength band proved to be best correlated with mean stand defoliation. After normalisation of satellite data for topographic conditions, the correlation coefficient increased from -0,19 to -0,83. Normalising satellite data for species composition did not improve the results though. The correction coefficients involved in the procedure were originally developed for Landsat TM, and proved to be inadequate for the LISS-3 data set. A thorough examination of the effects of species composition on LISS-3 data is needed to yield better results. The correlation between observed defoliation in the verification stands and predicted (based on the inverse regression function between corrected NIR values and defoliation in reference stands) was 0,70, despite a very limited range of defoliation in the verification set. IRS-1C LISS-3 is fully comparable to Landsat TM for spruce defoliation studies, although the results would probably not be significantly improved