Multiple texture layers may be used on a terrain. The first layer is sometimes referred to as the base layer. Additional layers may be added and blended onto the layers below. An RGBA texture called an alpha map is used to control blending. When an alpha map is loaded with index 0, one color channel corresponds to each of the first four layers. See LoadTerrainAlphamap for more information. If you are working in the sandbox, alpha maps are automatically created and managed when you add new texture layers.
5 layers are currently supported. There may be only one terrain atm.