The interaction of two diamond powders and synthetic diamond single crystals with H2O has been studied in the temperature range of 650-850 °C under pressures up to 500 MPa. The reaction products were characterized using electron paramagnetic resonance (EPR), Raman and Fourier transform infra-red spectroscopy, X-ray diffraction, scanning electron microscopy, transmission electron microscopy (TEM) and selected area diffraction. A noticeable interaction of fine grain diamond powders with H2O starts at approx. 700 °C while single crystals are stable up to 800 °C. At 800-850 °C, etching pits appear on the single crystal diamond surface. Thermodynamic calculations predict the formation of hydrogen, carbon oxides and hydrocarbons. Formation of graphitic carbon via the fluid is observed. Redeposition of nanocrystalline diamond and healing of crystal defects are suggested by TEM and EPR investigations.