The adhesion, structure architecture, and residual stresses of crystalline diamond coatings (CDCs) on cemented carbide inserts are the factors that significantly affect tool life. The influence of these factors on cutting performance cannot be investigated separately since interactions among them exist. The paper elucidates such dependencies to optimize the CDC architecture and improve cutting performance. In this context, diamond coatings possessing different architectures were deposited on cemented carbide tools. The fatigue endurance and the milling performance of the coated tools were investigated using impact and milling tests, respectively. The residual stresses in the film structures were determined through impact tests and appropriate (Finite Element Analysis) FEA evaluation of the corresponding results. According to the obtained results, the application of a bottom micro-structured CDC prior to the deposition of an upper nanolayered one with inferior thickness improves the coated tools’ cutting performance. An optimum coating architecture is associated with a thickness ratio between the micro-structured bonding to the upper nanolayered CDCs of 2/1. Hereupon, the augmentation of coated tool life via the application of an optimum diamond coating architecture compensates for the high tool cost and improves milling productivity. The latter is further enhanced as the number of tool replacements decreases.