Most natural diamonds have ages between 1 billion and 3.5 billion years. Most were formed at depths between 150 and 250 kilometers (93 and 155 mi) in the Earth's mantle, although a few have come from as deep as 800 kilometers (500 mi). Under high pressure and temperature, carbon-containing fluids dissolved minerals and replaced them with diamonds. Much more recently (tens to hundreds of million years ago), they were carried to the surface in volcanic eruptions and deposited in igneous rocks known as kimberlites and lamproites.

Colors in diamond originate from lattice defects and impurities. Nitrogen is by far the most common impurity found in gem diamonds and is responsible for the yellow and brown color in diamonds. Boron is responsible for the blue color. In order of increasing rarity, yellow diamond is followed by brown, colorless, then by blue, green, black, pink, orange, purple, and red. "Black", or Carbonado, diamonds are not truly black, but rather contain numerous dark inclusions that give the gems their dark appearance. Colored diamonds contain impurities or structural defects that cause the coloration, while pure or nearly pure diamonds are transparent and colorless.

The most common impurity, nitrogen, causes a slight to intense yellow coloration depending upon the type and concentration of nitrogen present. The Gemological Institute of America (GIA) classifies low saturation yellow and brown diamonds as diamonds in the normal color range and applies a grading scale from "D" (colorless) to "Z" (light yellow). Diamonds of a different color, such as blue, are called fancy colored diamonds and fall under a different grading scale.

The Cullinan Diamond is the largest gem-quality rough diamond ever found, weighing 3,106.75 carats (621.35 g), discovered at the Premier No. 2 mine in Cullinan, South Africa, on 26 January 1905. It was named after Thomas Cullinan, the mine's chairman. In April 1905, it was put on sale in London, but despite considerable interest, it was still unsold after two years. In 1907, the Transvaal Colony government bought the Cullinan and presented it to King Edward VII, of the United Kingdom, who had it cut by Asscher Brothers in Amsterdam.

First, diamonds are all priced per carat. So, let’s say a 0.50 carat diamond has a price of $1000 per carat. That diamond’s price for the stone would be $1400 * 0.50, or $700. Secondly, diamond prices per carat increase as you jump up to higher weight class/categories. Therefore, diamond prices increase exponentially with weight, since their prices increase both due to the increased weight and due to the higher price per carat for the increased weight class/category. In other words, a 2.0 carat diamond is not worth the same as two 1.0 carat diamonds in cost/value; it will most likely be a lot more. Since diamonds are a retail product driven more by emotions than reasons, a 0.99ct diamond is worth only about 1% more than a similar diamond weighing 0.98ct. But a 1.00ct diamond is worth about 20% more than a similar 0.99ct diamond. “Why is that?” one may ask. There is no right answer but maybe it is because now you can say it’s a “one carat diamond,” or maybe because now it’s three full digits. Who knows? However, with diamonds, it’s all about the consumer’s perception. This little quirk about the business is the sole reason there are so many poorly cut diamonds out there, because a poorly cut diamond can weigh more, and be sold at a higher cost than a perfectly cut diamond in a lower class/category.

Until the middle of the twentieth century, there was no agreed-upon standard by which diamonds could be judged. The Gemological Institute of America “GIA” created the first, and now globally accepted standard for describing diamonds: Color, Clarity, Cut and Carat Weight, also known as the 4 C’s. Now most people, when shopping for a diamond, might be swayed by a smooth-talking sales-rep into thinking that the Color or the Clarity is where one should focus most of their attention. However, of the 4 C’s, Jewel Bear believes that the Cut is the most important factor when shopping for diamonds. As explained above about the pricing of diamonds, the Cut can greatly influence the price of the diamond, more often, even more so than Color and Clarity. The Cut also dictates how brightly a diamond shines, because the path light takes to pass through the diamond is refracted by the angles and sides of how the diamond was cut. Therefore, please do not overlook the Cut when shopping for a diamond.

Diamonds in general do not glow in the dark. However, some diamonds, when subjected to ultra-violet light will emit a small blue glow, called fluorescence. Roughly 30% of diamonds have fluorescence to some degree. Overall, diamond fluorescence should not be a major factor in the purchase of a diamond since its effects are negligible, and sometimes even slightly positive. Colorless (D-F) diamonds with a Strong fluorescence can sell at up to a 15% discount since the fluorescence is perceived as a defect. On the other hand, fluorescence can make diamonds of I-M color appear up to one grade whiter and therefore tend to sell at a slight premium when they possess Medium to Very Strong fluorescence.

It is important to note that “carat” should not be confused with “karat,” the unit that measures the purity of gold. The term “carat” is derived from the carob seed, the ancient unit of measure for diamond weight. The carob seeds themselves are inedible, but they were observed to have a very uniform size and weight. This made them very useful for traders. The seeds were used to balance a scale when weighing precious gemstones, where the tiniest change in weight makes a difference. A higher number of seeds indicated a heavier and therefore more valuable stone. Different countries had slightly different values for what number of seeds was equivalent to what value of gems, but the use of the seeds was consistent throughout the Middle East and Europe. In areas of the world where carob was not as popular, grains of wheat or rice were used in similar ways to discern the weight of diamonds

Diamonds are the hardest naturally occurring substance found on earth. While a small percentage of diamonds are used for jewelry, most diamonds are used industrially. Because of their hardness, diamonds are extremely useful when used to cut, grind, or drill other materials.