Numerous　vegetation　indexes　have　been　developed　for　assessing　vegetation　characteristics　and　are　still　of　increasing　importance　in　environmental　application　of　remote　sensing.　However,　few　of　them　are　targeted　to　reduce　topographic　effects　in　rugged　area.　A　novel　topography-adjusted　vegetation　index　(TAVI)　is　presented　in　this　paper　by　combination　of　near-infrared　and　red　wavebands　data　with　topography　adjusting　coefficient　without　digital　elevation　model　(DEM)　data.　The　validity　of　TAVI　is　illustrated　with　a　case　study　in　Changting　county,　a　mountainous　area　in　southeast　of　China.　The　experimental　results　show　that　the　proposed　algorithm　can　effectively　eliminate　topographic　effects　caused　by　rugged　terrain.　The　slope　of　linear　regression　equation　of　TAVI　-　the　solar　incidence　cosine,　and　the　correlation　coefficient　between　them　are　only　around　0.01　respectively.　It　also　indicates　that　this　topography-adjusted　vegetation　index　could　be　applied　in　other　mountainous　areas.　©　2010　IEEE.