The interfacial structures of diamond coatings deposited on pure titanium substrate were analyzed using scanning electron microscopy and grazing incidence X-ray diffraction. Results showed that beneath the diamond coating, there was one titanium carbide and hydride interlayer, followed by a heat-affected and carbon/hydrogen diffused Ti layer. Residual stress in the diamond coating and TiC interlayer under different process parameters were measured using Raman and X-ray diffraction (XRD) methods. Diamond coatings showed large compressive stress on the order of a few giga Pascal. XRD analysis also showed the presence of compressive stress in the TiC interlayer and tensile stress in the Ti substrate. With increasing deposition duration, or decreasing plasma power and concentration of CH4 in gas mixture, the compressive residual stress in the diamond coating decreased. The large residual stress in the diamond coating resulted in poor adhesion of the coatings to substrate, but adhesion was also related to other factors, such as the thickness and nature of the TiC interlayer, etc. A graded interlayer design was proposed to lower the thermal stress, modify the interfacial structure and improve the adhesion strength.