An accurate computer-assisted method to perform segmentation of brain tumor on apparent diffusion coefficient (ADC) images and evaluate its grade (malignancy state) has been designed using a mixture of unsupervised artificial neural networks (ANN) and hierarchical multiresolution wavelet. Firstly, the ADC images are decomposed by multiresolution wavelets, which are subsequently selectively reconstructed to form wavelet filtered images. These wavelet filtered images along with FLAIR and T2 weighted images have been utilized as the features to unsupervised neural network - self organizing maps (SOM) - to segment the tumor, edema, necrosis, CSF and normal tissue and grade the malignant state of the tumor. A novel segmentation algorithm based on the number of hits experienced by Best Matching Units (BMU) on SOM maps is proposed. The results shows that the SOM performs well in differentiating the tumor, edema, necrosis, CSF and normal tissue pattern vectors on ADC images. Using the trained SOM and proposed segmentation algorithm, we are able to identify high or low grade tumor, edema, necrosis, CSF and normal tissue. The results are validated against manually segmented images and sensitivity and the specificity are observed to be 0.86 and 0.93, respectively.