An object of this invention is to provide a fine powder of diamond particles of less than 50 nm with a narrow particle size range. The diamond is single crystalline and characterized with a lot of sharp edges and sharp points. Another object is to provide a method for efficiently producing such fine powder.The method comprises mechanically crushing a raw material of single crystalline diamond particles to prepare starting minute particles of diamond, then imparting hydrophilic quality to the surface of diamond particles. As hydrophilic the diamond particles are dispersed in water to form a slurry, which is set and kept weakly alkaline. The slurry is then subjected to a preliminary grading step, whereby the slurry is removed of a top particle size fraction of the diamond particles that has a D50 size of 60 nm or more. Eliminated of said top particle size fraction, the slurry is then diluted with water to regulate the diamond concentration to 0.1% (by weight) or less. The slurry so conditioned is subjected to a centrifugal force, whereby a coarser particle size fraction of the diamond particles is condensed to a solid cake and removed from the slurry. Effluent slurry is taken out from the centrifugal grading that contains a fraction of the diamond particles having decreased particle sizes.