Diamond paste is a type of polishing compound made from finely ground or powdered diamond particles, and some kind of liquid, usually water based. Diamond powder itself is simply diamond paste without the water or other liquid binding agent. It may come in a syringe for more exact application, or even come in a small pump-spray bottle. Some manufacturers of diamond paste produce pastes with different sized grits in specific colors. Color coding the diamond paste can facilitate selecting the proper size of grit for the surface that is to be polished.

Diamond paste can be used to polish or sharpen a variety of tools and surfaces. Diamond paste is recommended for finely polishing various metals, including metal blades and other metal surfaces. In the case of a metal blade, of course, the diamond paste not only polishes the flat surface of the blade, but also finely sharpens the cutting surface. Diamond paste is appropriate for use on ceramic, glass, and mineral surfaces. It can also be used to clean surfaces made out of the aforementioned materials.

Using diamond paste to sharpen a metal tool is considered the best way to get the sharpest edge possible. When used in this manner, it may also be called diamond lapping paste, which is available in a number of different types with different sized grits. The size of the grit is measured in microns. In other words, a one micron diamond paste is a paste with grit particles one micron in width. A micron is equal to one millionth of a meter or 0.00003937 inches (0.000001 m). The smaller the grit, the more finely sharpened the edge will be.

Diamond paste may be applied with a polishing cloth. A product called Diamond polishing extender fluid can be used to help with evenly distributing the diamond paste on the polishing cloth. This, in turn, ensures a more even polish. Diamond paste may also be used with a tool called a strop, though this is less common. A strop is a hand-held, flat, paddle-like tool, which is made from synthetic material. The strop is flat and even, perhaps with rounded edges. Diamond paste, or another polishing substance, is applied to the blade of a tool, and rubbed against the flat surface of the strop.

Materials that are difficult to polish may require a specific type of diamond paste known as polycrystalline diamond paste. This type of diamond paste differs from the typical monocrystalline diamond paste in that the diamond grit particles are of a different shape. Grit particles in a monocrystalline diamond paste are flatter in shape, have fewer cutting edges, and these edges are longer. The particles in a polycrystalline diamond paste are multifaceted, and spherical in shape. This simply means that the particles in a polycrystalline diamond paste have more edges.

More cutting edges on the diamond particles create a more abrasive grit than that of other pastes. Diamond paste with polycrystalline grit might be used to clean a surface, then is followed by a diamond paste with a monocrystalline grit for more fine polishing.