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Agricultural terraces are features that provide a number of ecosystem services. As a result, their maintenance is supported by measures established by the European Common Agricultural Policy (CAP). In the framework of CAP implementation and monitoring, there is a current and future need for the development of robust, repeatable and cost-effective methodologies for the automatic identification and monitoring of these features at farm scale. This is a complex task, particularly when terraces are associated to complex vegetation cover patterns, as happens with permanent crops (e.g. olive trees). In this study we present a novel methodology for automatic and cost-efficient identification of terraces using only imagery from commercial off-the-shelf (COTS) cameras on board unmanned aerial vehicles (UAVs). Using state-of-the-art computer vision techniques, we generated orthoimagery and digital surface models (DSMs) at 11 cm spatial resolution with low user intervention. In a second stage, these data were used to identify terraces using a multi-scale object-oriented classification method. Results show the potential of this method even in highly complex agricultural areas, both regarding DSM reconstruction and image classification. The UAV-derived DSM had a root mean square error (RMSE) lower than 0.5 m when the height of the terraces was assessed against field GPS data. The subsequent automated terrace classification yielded an overall accuracy of 90% based exclusively on spectral and elevation data derived from the UAV imagery. [Copyright &y& Elsevier]