The ultrashort-laser photoexcitation and structural modification of buried atomistic optical impurity centers in crystalline diamonds are the key enabling processes in the fabrication of ultrasensitive robust spectroscopic probes of electrical, magnetic, stress, temperature fields, and single-photon nanophotonic devices, as well as in “stealth” luminescent nano/microscale encoding in natural diamonds for their commercial tracing. Despite recent remarkable advances in ultrashort-laser predetermined generation of primitive optical centers in diamonds even on the single-center level, the underlying multi-scale basic processes, rather similar to other semiconductors and dielectrics, are almost uncovered due to the multitude of the involved multi-scale ultrafast and spatially inhomogeneous optical, electronic, thermal, and structural elementary events. We enlighten non-linear wavelength-, polarization-, intensity-, pulsewidth-, and focusing-dependent photoexcitation and energy deposition mechanisms in diamonds, coupled to the propagation of ultrashort laser pulses and ultrafast off-focus energy transport by electron–hole plasma, transient plasma- and hot-phonon-induced stress generation and the resulting variety of diverse structural atomistic modifications in the diamond lattice. Our findings pave the way for new forthcoming groundbreaking experiments and comprehensive enlightening two-temperature and/or atomistic modeling both in diamonds and other semiconductor/dielectric materials, as well as innovative technological breakthroughs in the field of single-photon source fabrication and “stealth” luminescent nano/microencoding in bulk diamonds for their commercial tracing.