Diffraction phenomena usually can be formulated in terms of a potential that induces the redistribution of a wave's momentum. Using an atomic Bose-Einstein condensate coupled to the orbitals of a state-selective optical lattice, we investigate a hitherto unexplored nonadiabatic regime of diffraction in which no diffracting potential can be defined, and in which the adiabatic dressed states are strongly mixed. We show how, in the adiabatic limit, the observed coupling between internal and external dynamics gives way to standard Kapitza-Dirac diffraction of atomic matter waves. We demonstrate the utility of our scheme for atom interferometry and discuss prospects for studies of dissipative superfluid phenomena.Diffraction, the bending of waves around obstacles, is one of the most fundamental and ubiquitous phenomena in optics, with a centuries-old history going back to the works of Grimaldi, Huygens, and Young on the wave nature of light. In the modern era it has led to the understanding of x-rays [1, 2], has provided direct proof for the wave nature of particles [3], and today finds many applications in physics and materials science, ranging from electron, x-ray and neutron diffraction, to applications in atom optics [4,5].Quite generally, diffraction is caused by a positiondependent potential with absorptive (imaginary) and/or dispersive (real) character. While the former includes material structures and diffraction gratings, an example for the latter is the ponderomotive potential exerted on electrons by an optical standing wave, as originally suggested by Kapitza and Dirac [6]. Kapitza-Dirac diffraction of electrons was first demonstrated only fairly recently [7], well after the first observation of an analogous effect on neutral atoms based on the ac Stark shift near an atomic resonance [8]. It has also been applied to Bose-Einstein condensates [9,10] and has become an important and often-used tool in atom interferometry and metrology [5].In this paper, we investigate a hitherto unexplored regime of diffraction, in which a diffracting potential cannot be defined. In our experiment we diffract an atomic matter wave from a microwave-dressed optical lattice, with a diffractive dynamics that is qualitatively different from Kapitza-Dirac diffraction of dressed matter waves from a periodic optical potential. We note that the coherent mixing of states interacting with an external field is often used for the engineering of dressed potentials [11][12][13][14][15][16][17][18][19]. Deviations from adiabaticity have previously been found to have deleterious effects on dressed-state lifetimes [20,21]. In our experiment, we enter the strongly nonadiabatic regime, in which coherent Landau-Zener transitions of the atomic wavefunction between the adiabatic dressed potentials (driven by zero-point motion) induce a strong coupling between internal and external degrees of freedom, leading to a breakdown of the usual BornOppenheimer (adiabatic) approximation [22]. Our experimental procedure, cf. Fig. 1a, uses microwave radiation ...