A method and system for estimating processor utilization from power measurements provides an estimate of processor utilization that can be computed outside of the processor and operating system. Measurements of the processor power consumption are gathered over short intervals in a histogram. The idle power consumption of the processor is determined, and a threshold value higher than the idle power consumption level is computed from the idle power consumption. The number of histogram counts for bins greater than the threshold is normalized to the total number of measurements, providing a fractional value that corresponds to the processor utilization over the measurement interval. The fractional value can then be used in a power management algorithm that adjusts the frequency and optionally the voltage of the processor or group of processors based on their utilization.