On-line measurement of surface roughness is an important element in a Computer Integrated Manufacturing (CIM) environment. Current methods of contact measurement are not suitable as they interfere with the machining process. Optical methods, such as laser profilometry, in general, use expensive and large equipment, which pose difficulties in the implementation on the machine tool for on-line monitoring. This paper presents an optical area based surface characterization technique which applies fractal geometry and basic light scattering principles. The novelty in this approach is that the above principles are used to facilitate in- process measurement and control. A prototype of this system is developed and the experimental results are presented. The capabilities and future potential of this system are demonstrated.