A sensing electrode selection algorithm is disclosed for use with an implantable pulse generator having an electrode array. The algorithm automatically selects optimal sensing electrodes in the array to be used with a pre-determined stimulation therapy appropriate for the patient. The algorithm preferably senses stimulation artifacts using different sensing electrodes, and more specifically different sensing electrode pairs as is appropriate when differential sensing is used. The algorithm further preferably senses these stimulation artifacts with the patient placed in two or more postures. The algorithm processes the stimulation artifact features measured at the different sensing electrodes and at the different postures to automatically determine one or more sensing electrode pairs that best distinguishes the two or more postures given the prescribed stimulation therapy.