Effects of TiH2 on the mechanical properties and microstructures of Fe-based diamond composites as well as the performance of diamond segments in circular sawing of granites are presented in this paper. Experimental results reveal that the addition of 2%TiH2 into the Fe-based matrix leads to decreases in the mechanical properties of both matrix and diamond composites. The wear resistance of the saw-blade segments decreases by 7.3%. Microscope observations reveal that the specimen without TiH2 shows fewer pores and denser structures in the base matrix. The fracture surfaces of the bending test specimens exhibit ductile cup and cone behavior and strong bonding between the matrix and diamond. SEM micrographs indicate that there are much more pull-outs of diamond grits, much more serious wear of diamond particles and erosion of metal matrix on the worn surface of saw-blades segments with 2% TiH2 in the matrix.