The idea and some methods of chaos and fractal to generate the 3D graphics and image are introduced at the beginning of this paper. Then we take the generation of a ball graphic as the example to analyses the shortcoming of the traditional algorithm on the computer. A new algorithm based on fractal theory was constructed to make up this shortcoming. What's more, some application of chaos in the generation of graphics and image processing in computer area are mentioned. Base on that, the way of terrain generation by the fractal theory is discussed in detail. On the above, the generation method of terrain is expressed and herein we make some advanced research on the application of chaos theory and fractal technology in pattern recognition area. Some characteristic points were selected from a terrain picture and used as seeds. Then we recognize and simulate the terrain by the generation algorithm of terrain.