Coherent ensembles of N qubits present an advantage in quantum phase estimation over separable mixtures, but coherence decay due to classical phase diffusion reduces overall precision. In some contexts, the strength of diffusion may be the parameter of interest. We examine estimation of both phase and diffusion in large spin systems using a novel mathematical formulation. For the first time, we show a closed form expression for the quantum Fisher information for estimation of a unitary parameter in a noisy environment. The optimal probe state has a non-Gaussian profile and differs also from the canonical phase state; it saturates a new tight precision bound. For noise below a critical threshold, entanglement always leads to enhanced precision, but the shot-noise limit is beaten only by a constant factor, independent of N . We provide upper and lower bounds to this factor, valid in low and high noise regimes. Unlike other noise types, it is shown for N 1 that phase and diffusion can be measured simultaneously and optimally by canonical phase measurements.