The impregnated diamond composites are widely used for rock drilling and the processing of construction materials. In order to decrease the sintering temperature so as to reduce the thermal damage of diamond, and ultimately improve the sharpness of the diamond tool, the iron-nickel pre-alloyed powder sintered specimens and the impregnated diamond composites were prepared by powder metallurgy. The microstructure and phase composition of specimens were characterized by SEM and EDS. The effect of sintering temperature and the content of WC particles on the mechanical properties of the specimens, such as relative density, hardness, bending strength and wear resistance were investigated. The results showed that the relative density, hardness and bending strength of the sintered specimens increased first and then decreased with the sintering temperature changing from 700 °C to 900 °C. The performance of the specimens sintered at 800 °C was the best, with the corresponding values of 97.75%, 24.0 HRC and 2114.87 MPa. The optimum content of WC was 30wt%, and the grinding ratio reached to 424.11. The rate of penetration of drilling bits with iron-nickel pre-alloyed based matrix increased by 91.14% compared with the traditional bits which used 663Cu-Co-Ni-Mn as binder.