Then select two lambert materials you created. And graph their networks in hypershade.

Delete shaders and shading groups

Create another lambert shader and plug layered texture into its color.

Make three colors in layered texture (just click near that green rectangle and new will show). Change their color's to grass color, dirt color, and rocks color (later we will assign texture to them)

Create reverse node, and connect one texture to it.

Then create luminance node, and connect reverse to it. I did this because the mountain tops need to be white instead of black. Luminance is used to convert RGB data into Alpha (grayscale) data.

Then MMB luminance node to connect it with rock alpha.

Change blending mode to over

Then connect second texture with alpha of second color (ground color)

Set blending mode also to over on both layers. Third could stay to none since there’s nothing beneath it

This whole layering thing could be done in many different ways, so feel free to explore…

If you render at this point, result will look something like this

Connect textures to layer colors.

Also, you might need to increase Repeat U and V, to get more texture space.

Create Directional light, set the color, and set intensity to something like 1.3 to 1.5

Here I also set shadow maps, just for quicker rendering.

If you plan to render using software renderer or you just don’t want to use final gathering or global illumination, then create low intensity directional lights to get sky light. Set color according to sky color. These lights shouldn’t have shadows.

Also, I connected layered texture to bump of the ground shader. Use very low values for bump here. Here is 0.2, but I think in the end I set it to 0.05 or so.