The imaging laser radar was an ideal imaging sensor to get the high precision 3D terrain for Terrain aided navigation (TAN). For the application, decreasing the mismatching rate was very important. In this paper, the measurement model of imaging laser radar was introduced and a novel 3D terrain matching algorithm with low mismatching rate was presented. According to the theory of function orthogonal decomposition, a terrain orthogonal decomposition feature vector (TODFV), composed of the orthogonal decomposition coefficients of the digital elevation map (DEM), was employed to represent the features of the terrain. Then TODFV was used to generate an interim matching position vector (IMPV). The IMPV were utilized to do real-time confidence analysis to improve the matching confidence, and were fused to give the final matching at the last. The algorithm could effectively decrease the mismatching rate of terrain matching algorithm, and improved the reliability of TAN. Experiments showed that the algorithm was effective and robust.Index Terms -terrain matching, feature vector, image laser radar.