Altitude estimation is important for successful control and navigation of unmanned aerial vehicles (UAVs). UAVs do not have indoor access to GPS signals and can only use on-board sensors for reliable estimation of altitude. Unfortunately, most existing navigation schemes are not robust to the presence of abnormal obstructions above and below the UAV. In this work, we propose a novel strategy for tackling the altitude estimation problem that utilizes multiple model adaptive estimation (MMAE), where the candidate models correspond to four scenarios: no obstacles above and below the UAV; obstacles above the UAV; obstacles below the UAV; and obstacles above and below the UAV. The principle of Occam’s razor ensures that the model that offers the most parsimonious explanation of the sensor data has the most influence in the MMAE algorithm. We validate the proposed scheme on synthetic and real sensor data.