By extending the 1D Lloyd's algorithm to 3D, we have presented a method for selecting reference anisotropic parameters for wavefield downward continuation. The modified Lloyd's algorithm is a dynamic process that automatically determines the fewest reference parameters necessary to best characterize the actual model for each depth level. It eliminates reference parameters that are redundant or contribute little to the result. Therefore, by using the modified Lloyd's algorithm, it is possible for us to obtain an optimum migration result with relatively few reference parameters, greatly reducing the computational cost compared with the conventional method. Our test on real data shows that reference anisotropic parameters selected by the modified 3D Lloyd's algorithm characterize the actual model well, and that migrating with those reference parameters leads to an image with higher quality, at lower cost, than the conventional selection method.