Diamond, with ultrahigh hardness, high wear resistance, high thermal conductivity, and so forth, has attracted worldwide attention. However, researchers found emergent reactions at the interfaces between diamond and ferrous materials, which significantly affects the performance of diamond‐based devices. Herein, combing experiments and theoretical calculations, taking diamond–iron (Fe) interface as a prototype, the counter‐diffusion mechanism of Fe/carbon atoms has been established. Surprisingly, it is identified that Fe and diamond first form a coherent interface, and then Fe atoms diffuse into diamond and prefer the carbon vacancies sites. Meanwhile, the relaxed carbon atoms diffuse into the Fe lattice, forming Fe3C. Moreover, graphite is observed at the Fe3C surface when Fe3C is over‐saturated by carbon atoms. The present findings are expected to offer new insights into the atomic mechanism for diamond‐ferrous material's interfacial reactions, benefiting diamond‐based device applications.