Three-dimensional measurement of joint motion is a promising tool for clinical evaluation and therapeutic treatment comparisons. Although many devices exist for joints kinematics assessment, there is a need for a system that could be used in routine practice. Such a system should be accurate, ambulatory, and easy to use. The combination of gyroscopes and accelerometers (i.e., inertial measurement unit) has proven to be suitable for unrestrained measurement of orientation during a short period of time (i.e., few minutes). However, due to their inability to detect horizontal reference, inertial-based systems generally fail to measure differential orientation, a prerequisite for computing the three-dimentional knee joint angle recommended by the Internal Society of Biomechanics (ISB). A simple method based on a leg movement is proposed here to align two inertial measurement units fixed on the thigh and shank segments. Based on the combination of the former alignment and a fusion algorithm, the three-dimensional knee joint angle is measured and compared with a magnetic motion capture system during walking. The proposed system is suitable to measure the absolute knee flexion/extension and abduction/adduction angles with mean (SD) offset errors of -1 degree (1 degree ) and 0 degrees (0.6 degrees ) and mean (SD) root mean square (RMS) errors of 1.5 degrees (0.4 degrees ) and 1.7 degrees (0.5 degrees ). The system is also suitable for the relative measurement of knee internal/external rotation (mean (SD) offset error of 3.4 degrees (2.7 degrees )) with a mean (SD) RMS error of 1.6 degrees (0.5 degrees ). The method described in this paper can be easily adapted in order to measure other joint angular displacements such as elbow or ankle.