Nanodiamonds (NDs) are innovative additives when a combination of mechanical, thermal, tribological, and dielectric properties are required. In this study, a surface modification with oleic acid (OA) is developed for the deaggregation and prolonged dispersion of NDs in oil, and the effect of the NDs as lubricant additives on the tribological properties of a steel substrate is investigated. The OA renders the ND surface hydrophobic and decreases the average particle size from 268.6 to 20.1 nm. The OA-treated NDs exhibit very stable dispersion in oil even after more than 10 days, compared with the untreated NDs. From the analyses of the friction coefficient, wear loss, and worn surfaces using a ball-on-disk wear test, it is concluded that a 0.05 wt% addition of OA-treated NDs in oil lubricant provides excellent friction and anti-wear properties with the friction coefficient being reduced by 23%. (C) 2016 Elsevier B.V. All rights reserved.