Finite element model was developed to analyze thermal residual stress distribution of diamond coating on graded and homogeneous substrates. Graded cemented carbides were formed by carburizing pretreatment to reduce the cobalt content in the surface layer and improve adhesion of diamond coating. The numerical calculation results show that the surface compressive stress of diamond coating is 950 MPa for graded substrate and 1 250 MPa for homogenous substrate, the thermal residual stress decreases by around 24% due to diamond coating. Carburizing pretreatment is good for diamond nucleation rate, and can increase the interface strength between diamond coating and substrate.