Surface finish of machined parts determines the functionality of the product and also the machining requirements for making the parts. On-line monitoring of surface finish has been an active area of machining research. Conventional contact techniques used for surface finish measurement are not suitable for in-process measurement as they interfere with the machining operation. In this research, the principle of fractal geometry and image processing techniques are used to implement a practical areabased surface finish monitoring system. Fractal dimension estimated from the captured image is used to characterize the machined surface with success.