Osteoarthritis is a large problem affecting many patients globally, and diagnosis of osteoarthritis is often done using evidence from arthroscopic surgeries. Making a correct diagnosis is hard, and takes years of experience and training on thousands of images. Therefore, developing an automatic solution to perform the diagnosis would be extremely helpful to the medical field. Since machine learning has been proven to be useful and effective at classifying and segmenting medical images, this thesis aimed at solving the problem using machine learning methods. Multifractal analysis has also been used extensively for medical imaging segmentation. This study proposes two methods of automatic segmentation using neural networks and multifractal analysis. The thesis was performed using real arthroscopic images from surgeries. MultiResUnet architecture is shown to be well suited for pixel perfect segmentation. Classification of multifractal features using neural networks is also shown to perform well when compared to related studies.