The terrain matching navigation system with radar altimeter is prone to be influenced by electronic interference, so the laser altimeter with infra-red/blue-green dual-wavelength outputs was designed to replace the radar altimeter for cruise missile. Furthermore, the hard problem could be resolved, i.e., the radar altimeter couldn’t work over the sea, but the laser altimeter could. Based on laser altimetry/bathymetry equations and the output SNR expression, the digital simulation calculation was used to assess the performance of the laser altimeter. The simulation results show: the laser altimeter can satisfy the need of altimetry and bathymetry when the peak power of infra-red and blue-green pulses respectively reach 50 kW and 450 kW. At the same time, such parameters can be decided, including pulse energy, pulse width, pulse repetition rate, and divergence angle of laser beam, etc.