Expert hand-drawing of magnetic resonance image (MRI) features can be tedious and time consuming. MRI of the knee were acquired from eight subjects to develop an automated segmentation approach. The regions of interest (ROI) were femur, tibia, and patella cartilage. The Karhunen-Loeve transformation was used to construct prototypical ROI with accentuated features and reduced noise level. Adaptive template matching was then used to translate the prototypical ROI locations for detection and optimal overlap of ROI in test images. Cartilage boundaries at the optimal overlap area were computed based on standard gradient methods.