This research suggests a fuzzy-logic based terrain identification method and the smart prosthetic ankle system, which automatically controls its ankle angle, based on the detected terrain environment, to assist comfortable gait performance of transtibial amputee. Suggested terrain identification method uses shank angle from three different stages of the stance phase in gait cycle (Foot-flat, Heel-strike, and Toe-off) as input for the fuzzy-logic calculation, and detects five different terrain environment (Flat, Up-slope, Down-slope, Up-stairs, and Down-stairs) within a single step of gait. Suggested smart prosthetic ankle system comprises of 1) load-cell to measure GRF (ground reaction force), 2) IMU (inertial measurement unit) sensor to measure shank angle, 3) actuator and 4 bar-linkage mechanism to control ankle angle accordingly for detected terrain environment, and 4) MCU (microcontroller unit) to carry out calculations and control algorithm for ankle actuation. To verify the accuracy of the terrain identification method of the system, the experiment was conducted, which consisted of 4 transtibial amputees to walk on 5 different terrain conditions, and the result has shown 97.5% detection accuracy. Compared to previous studies, our suggested smart prosthetic ankle system, along with its terrain identification algorithm, uses lesser number of sensors and step cycle to accurately detect gait environment, which may lead to providing better gait assistance and practical convenience for transtibial amputees.