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Osteoarthritis (OA) is one of the most prevalent chronic conditions. The histological cartilage changes in OA include surface erosion and irregularities, deep fissures, and alterations in the staining of the matrix. The reversibility of these chondral alterations is still under debate. It is expected that clinical and basic science studies will provide the clinician with new scientific information about the natural history and optimal treatment of OA at an early stage. However, a reliable method for detecting microscopic changes in early OA has not yet been established. We have developed a novel system for evaluating articular cartilage, in which the acoustic properties of the articular cartilage are measured by introducing an ultrasonic probe into the knee joint under arthroscopy. The purpose of this study was to assess microscopic cartilage damage in OA by using this cartilage evaluation system on collagenase-treated articular cartilage in vivo and in vitro. Ultrasonic echoes from articular cartilage were converted into a wavelet map by wavelet transformation. On the wavelet map, the maximum magnitude and echo duration were selected as quantitative indices. Using these indices, the articular cartilage was examined to elucidate the relationships of the ultrasonic analysis with biochemical, biomechanical and histological analyses. In the in vitro study, the maximum magnitude decreased as the duration of collagenase digestion increased. Correlations were observed between the maximum magnitude and the proteoglycan content from biochemical findings, and the maximum magnitude and the aggregate modulus from biomechanical findings. From the histological findings, matrix staining of the surface layer to a depth of 500 μm was closely related to the maximum magnitude. In the in vivo study, the maximum magnitude decreased with increasing duration of the collagenase injection. There was a significant correlation between the maximum magnitude and the aggregate modulus. The evaluation system therefore successfully detected microscopic changes in degenerated cartilage with the use of collagen-induced OA.