This paper aims to design a wearable terrain recognition system, which might assist the control of powered artificial prosthetic legs. A laser distance sensor and inertial measurement unit (TMU) sensors were mounted on human body. These sensors were used to identify the movement state of the user, reconstruct the geometry of the terrain in front of the user while walking, and recognize the type of terrain before the user stepped on it. Different sensor configurations were investigated and compared. The designed system was evaluated on one healthy human subject when walking on an obstacle course in the laboratory environment. The results showed that the reconstructed terrain height demonstrated clearer pattern difference among studied terrains when the laser was placed on the waist than that when the laser was mounted on the shank. The designed system with the laser on the waist accurately recognized 157 out of 160 tested terrain transitions, 300 ms-2870 ms before the user switched the negotiated terrains. These promising results demonstrated the potential application of the designed terrain recognition system to further improve the control of powered artificial legs.