Ni-based composite coatings reinforced with diamond particles were fabricated via laser cladding. Response Surface Methodology (RSM) was employed to establish quadratic regression models linking process parameters (laser power, scanning velocity, shielding gas flow rate) to performance metrics (average microhardness and wear loss). Through integration with single factor experiments, the correlations between process parameters and target responses were systematically investigated and quantified, leading to the determination of optimal processing parameters. The optimized coatings were subjected to wear mechanism analysis using super-depth microscopy, SEM/EDS, and TEM, with particular focus on diamond particle failure modes and interfacial detachment behavior. Experimental results demonstrated strong agreement with RSM predictions (<7% deviation), confirming the optimized coating's superior wear resistance. Metallurgically bonded diamond particles during wear processes served three critical functions: load-bearing support, abrasive cutting resistance, and modification of abrasive particle trajectories. At the interface, Cr 3C 2 formed a semi-coherent structure with the diamond (111), enhancing adhesion and suppressing detachment. Conversely, the non-coherent Cr 3C 2/nickel-alloy interface and amorphous graphite layer weaken bonding, making detachment preferential. Detachment initiates pitting; abrasive particle entrapment in these pits reduces wear.