Recent advancements in powered lower limb prostheses have appeased several difficulties faced by lower limb amputees by using a Series-Elastic Actuator (SEA) to provide powered sagittal plane flexion. Unfortunately, these devices are currently unable to provide both powered sagittal plane flexion and 2-DOF at the ankle, removing the ankles capacity to invert/evert, thus severely limiting terrain adaption capabilities and user comfort. The developed 2-DOF ankle system in this paper allows both powered flexion in the sagittal plane and passive rotation in the frontal plane; a SEA emulates the biomechanics of the gastrocnemius and Achilles tendon for flexion, while a novel universal-joint system provides the 2-DOF. Several studies were undertaken to thoroughly characterize the capabilities of the device. Under both level and sloped-ground conditions, ankle torque and kinematic data was obtained by using force-plates and a motion capture system. The device was found to be fully capable of providing powered sagittal plane motion and torque very close to that of a biological ankle, while simultaneously being able to adapt to sloped terrain by undergoing frontal plane motion, thus providing 2-DOF at the ankle. These findings demonstrate that the device presented in this paper poses radical improvements to powered PAFD design.