This paper described the preparation method for composing high-grade synthetic diamond by water atomizing using FeNi30 powder catalyst.The FeNi30 powder was corroded by the 100Mpa super high-pressure water atomizing technique and selecting organic RY corrosion inhibitor. Contrast test of the original FeNi30 powder and the treated FeNi30 powder on synthetic diamonds were conducted under super high-temperature and high-pressure using cubic press. The result shows that after the FeNi30 powder was corroded,the FeO phase and Fe3O4 phase could not longer be found by X-Ray analysis.Furthermore,the oxygen content of the powder increased up to 100PPM under the natural condition for one year. After the powder was mixed with graphite powder, diamond could be made by isostatic pressing method. Its color became darker and its TTI value increased slightly. However, its penetrability was still different from the high-grade synthetic diamond made by gas atomizing FeNi30 powder catalyst.