In this work, we present the general concept of an instrumented smart knee prosthesis for in-vivo measurement of forces and kinematics. This system can be used for early monitoring of the patient after implantation and prevent possible damage to the prosthesis. The diagnosis of defects can be done by detecting the load imbalance or abnormal forces and kinematics of the prosthetic knee in function. This work is a step towards the fabrication of an instrumented system for monitoring the function of the knee in daily conditions. Studying the constraints of commercially available prostheses, we designed a minimal sensory system and required electronics to be placed in the polyethylene part of prostheses. Three magnetic sensors and a permanent magnet were chosen and configured to measure the prosthetic knee kinematics. Strain gauges were designed to measure the forces applied to the polyethylene insert. Kinematic and force measurements were validated on a mechanical knee simulator by comparing them to different reference systems. Embedded electronics, including the A/D converters and amplifier were designed to acquire and condition the measurements to wirelessly transmit them to an external unit. By considering the necessary power budget for all components, the optimum coil for remote powering was investigated. The necessary rectifier and voltage doubler for remote powering were also designed. This is the first system capable of internally measuring force and kinematics simultaneously. We propose to package the system in the polyethylene part, bringing versatility to the instrumented system developed, as the polyethylene part can be easily modified for different types of prostheses based on the same principle, without changing the prosthesis design.