A diamond impregnated drill bit features layered encapsulation of the diamond grit where the innermost layer is hardest or most abrasion resistant while succeeding layers are generally softer and less wear resistant. This can be accomplished by manipulating several variables in the encapsulation layers such as particle size or hard particle concentration. The outer layers can have added binder to make them softer. The encapsulated grit can be sintered or pre-sintered to make it less friable when handled.