E-textiles have shown great potential for development of soft sensors in applications such as rehabilitation and soft robotics. However, existing approaches require the textile sensors to be attached externally onto a substrate or the garment surface. This paper seeks to address the issue by embedding the sensor directly into the wearable using a computer numerical control (CNC) knitting machine. First, we proposed a design of the wearable knee brace. Next, we demonstrated the capability to knit a sensor with the stretchable surrounding fabric. Subsequently, we characterized the sensor and developed a model for the sensor's electromechanical property. Lastly, the fully knitted knee brace with embedded sensor is tested, by performing three different activities: a simple Flexion-extension exercise, walking, and jogging activity with a single test subject. Results show that the knitted knee brace sensor can track the subject's knee motion well, with a Spearman's coefficient (rs) value of 0.87 when compared to the reference standard.