Power system low frequency oscillations are detrimental to the stability and security of inter-connected power network. Conventional power system stabilizer（PSS） adopting local generator signals is not sufficiently effective to enhance the damping of the system. The recent advance in wide area measurement system（WMAS） is driving power community to accept the notion of wide-area monitoring and control. The method for signal selecting， allocation and parameter design of PSS adopting wide area signals is proposed based on the system observability and controllability and residue matrix. Simulations on a 16-machine test system are performed to demonstrate the advantage of designed wide area PSS.