Because of their unique photoluminescence and magnetic properties, nanodiamonds (NDs) are promising for biomedical imaging and therapeutical applications. However, these biomedical applications will hardly be realized unless the potential hazards of NDs to humans and other biological systems are ascertained. Previous studies performed in our group and others have demonstrated the excellent biocompatibility of NDs in a variety of cell lines without noticeable cytotoxicity. In the present paper, we report the first genotoxicity study on NDs. Our results showed that incubation of embryonic stem cells with NDs led to slightly increased expression of DNA repair proteins, such as p53 and MOGG-1. Oxidized nanodiamonds (O-NDs) were demonstrated to cause more DNA damage than the pristine/raw NDs (R-NDs), showing the surface chemistry specific genotoxicity. However, the DNA damages caused by either the O-NDs or the R-NDs are much less severe than those caused by multiwalled carbon nanotubes (MWNTs) observed in our previous study. These findings should have important implications for future applications of NDs in biological applications.