The family of carbon nanomaterials is a rich and exciting area of research that spans materials science, engineering, physics, and chemistry; and most recently, is having an impact in biology and medicine. However, spontaneous, inefficient (reversible and irreversible) phase transformations prevail at small sizes, and most (in the absence of stable surface passivation) diamond nanomaterials are decorated with a full or partial fullerenic outer shell. Although imperfect, these hybrid sp2/sp3 core–shell particles have been shown to exhibit some useful properties, particularly when combined with other imperfections, such as functional point defects. Among the variety of point defects found in diamond nanoparticles, the GR1, N-V, H3, and N3 defects emit strong and stable luminescence in the visible range. These optical properties can be harnessed for a variety of applications, provided that the structural integrity of the host nanodiamond can be assured. This chapter reviews a number of complementary computational studies examining the stability of point defects in colloidal diamond particles as a function of the radial distribution and types of surface chemistry. This data is used to predict the relative concentrations that may be expected at different sizes.