The traditional measurement method (e.g., field survey) of tree diameter circumference often has high labor costs and is time-consuming. Mobile laser scanning (MLS) is a powerful tool for measuring forest diameter at breast height (DBH). However, the accuracy of point cloud registration seriously affects the results of DBH measurements. To address this issue, this paper proposes a new method for extracting tree DBH parameters; it achieves the purpose of efficient and accurate extraction of tree DBH by point cloud filtering, single-tree instance segmentation, and least squares circle fitting. Firstly, the point cloud data of the plantation forest samples were obtained by a self-constructed unmanned vehicle-mounted mobile laser scanning system, and the ground point cloud was removed using cloth simulation filtering (CSF). Secondly, fast Euclidean clustering (FEC) was employed to segment the single-tree instances, and the point cloud slices at breast height were extracted based on the point sets of single-tree instances, which were then fitted in two dimensions using the horizontally projected point cloud slices. Finally, a circle fitting algorithm based on intensity weighted least squares (IWLS) was proposed to solve the optimal circle model based on 2D point cloud slices, to minimize the impact of misaligned point clouds on DBH measures. The results showed that the mean absolute error (MAE) of the IWLS method was 2.41 cm, the root mean square error (RMSE) was 2.81 cm, and the relative accuracy was 89.77%. Compared with the random sample consensus (RANSAC) algorithm and ordinary least squares (OLS), the MAE was reduced by 36.45% and 9.14%, the RMSE was reduced by 40.90% and 12.26%, and the relative accuracy was improved by 8.99% and 1.63%, respectively. The R2 value of the fitted curve of the IWLS method was the closest to 1, with the highest goodness of fit and a significant linear correlation with the true value. The proposed intensity weighted least squares circle-fitting DBH extraction method can effectively improve the DBH extraction accuracy of mobile laser scanning point cloud data and reduce the influence of poorly aligned point clouds on DBH fitting.