This page is about the gem. For the diamond ore, see Diamond (ore).
A Diamond Gem is an item dropped when diamond ore is mined. This (along with items in general) is only available in Indev, Infdev and Alpha mode. A diamond is only useful when crafted into something; it is the most durable building resource in the game. Diamonds can be used to make shovels, pickaxes, axes, hoes, swords, Armor and solid diamond blocks. As of the July 30th update (Seecret Friday Update 7), you can make a jukebox with diamonds.
It cannot be mined using stone, wooden or golden pickaxes. It can only be mined using an iron or diamond pickaxe.