Diamond composite materials are classified as superhard and exhibit exceptional abrasive resistance. Cemented tungsten carbide tools with a thick coating of diamond composite material (PCD) are finding increased usage in materials cutting operations in manufacturing, mining, minerals, gas and petroleum exploration and civil construction industries. Two major advantages derived from these coated tools are: (a) increased wear resistance and hence increased life-span of these tools and (b) their proven ability to handle “difficult-to-machine” materials as well as high-strength, extremely abrasive materials such as quartz-rich rocks, granites and basalts. In this research, the variability of the wear resistance of PCD coated tungsten carbide is correlated with microstructural variations. A detailed study of the microstructure and distribution of phases was performed using SEM, cathodoluminescence (CL) imaging, direct x-ray imaging, Raman spectroscopy as well as residual stress measurements using neutron diffraction.