The hardness and the wear resistance of the nano-diamond composite coatings were investigated by the micro-hardness tester and the friction tester. The relationship of the nano-diamond concentration, heat treatment temperature and hardness were revealed. These results show that the composite coatings have higher hardness, better wear resistance and lower friction coefficient under the uniform dispersing of the nano-diamond in the nickel matrix. The maximum hardness of the composite coatings reaches HV654 when the nano-diamond concentration is 30%. Frictional coefficient is decreased from 0.185 to 0.16. Moreover, the hardness does not reduce under annealing at 300°C. The frictional mechanism of the composite coatings indicates that the worn nano-diamond could block the direct contact between the composite coating and the standard ring. Spherical nano-diamond particles play the role in the "micro-ball" among the contact surfaces, the frictional coefficient is reduced and the wear resistance is improved.