Advantages from various diamond coatings can be fully utilised by constructing a composite structure. However, the composite coating containing microcrystalline diamond (MCD) and nanocrystalline diamond (NCD) is prone to interface delamination, due to the distinct interfaces between layers. In this paper, fine-grained diamond (FGD) is introduced into composite diamond coatings to eliminate obvious interfaces of diamond layers. Various monolayer diamond coatings (MCD, FGD, NCD) and composite diamond coatings (MCD/FGD, MCD/NCD, MCD/FGD/NCD) were prepared on cemented tungsten carbide (WC-Co) substrates adopting hot filament chemical vapour deposition (HFCVD) method. Scanning electron microscopy (SEM) morphologies of differing diamond coatings were observed, revealing no distinct interfaces between the layers of MCD/FGD/NCD coating. Surface roughness of differing coatings was obtained, with MCD/FGD/NCD coating exhibiting lower surface roughness than other composite coatings. X-ray diffraction (XRD) spectra of differing coatings were studied, indicating various composite diamond coatings exhibit high crystal quality. Raman spectra together with residual stress of these samples were analyzed, indicating that FGD layer contributes to a reduction of residual stress. Friction tests were conducted, demonstrating that MCD/FGD/NCD coating shows lower coefficient of friction (COF) than other composite coatings. Milling experiments on high-silicon aluminum alloy were executed for thoroughly evaluating the cutting performance of these coated cutters, revealing that MCD/FGD/NCD coated milling cutter performs outstanding cutting performance because of good interfacial integrity, superior surface smoothness, and low residual stress.