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Forest aboveground biomass (AGB) retrieval using synthetic aperture radar (SAR) backscatter has received extensive attention. The water cloud model (WCM), because of its simplicity and physical significance, has been one of the most commonly used models for estimating forest AGB using SAR backscatter. Nevertheless, forest AGB estimation using the WCM is usually based on simplified assumptions and empirical fitting, leading to results that tend to overestimate or underestimate. Moreover, the physical connection between the model and the polarimetric synthetic aperture radar (PolSAR) is not established, which leads to the limitation of the inversion scale. In this paper, based on the fully polarimetric SAR data from the Advanced Land Observing Satellite-2 (ALOS-2) Phased Array-type L-band Synthetic Aperture Radar (PALSAR-2), the relative contributions of the three major scattering mechanisms were first analyzed in a hilly area of southern China. On this basis, the traditional WCM was extended by considering the secondary scattering mechanism. Then, to establish the direct relationship between the vegetation scattering mechanism and forest AGB, a new relationship equation between the PolSAR decomposition model and the improved water cloud model (I-WCM) was constructed without the help of external data. Finally, a nonlinear iterative method was used to estimate the forest AGB. The results show that volume scattering is the dominant mechanism, accounting for more than 60%. Double-bounce scattering accounts for the smallest fraction, but still about 10%, which means that the contribution of the double-bounce scattering component is not negligible in forested areas because of the strong penetration capability of the long-wave SAR. The modified method provides a correlation coefficient R2 of 0.665 and a root mean square error (RMSE) of 21.902, which is an improvement of 36.42% compared to the traditional fitting method. Moreover, it enables the extraction of forest parameters at the pix scale using PolSAR data without the need for low-resolution external data and is thus helpful for high-resolution mapping of forest AGB. [ABSTRACT FROM AUTHOR]