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In this study we have investigated why diameters of tree stems, which are approximately cylindrical, are often overestimated by mobile laser scanning. This paper analyzes the physical processes when using ground-based laser scanning that may contribute to a bias when estimating cylinder diameters using circle-fit methods. A laser scanner simulator was implemented and used to evaluate various properties, such as distance, cylinder diameter, and beam width of a laser scanner-cylinder system to find critical conditions. The simulation results suggest that a positive bias of the diameter estimation is expected. Furthermore, the bias follows a quadratic function of one parameter - the relative footprint, i.e., the fraction of the cylinder width illuminated by the laser beam. The quadratic signature opens up a possibility to construct a compensation model for the bias.