We present a theoretical study of the structure and optical properties of nanodiamonds. Using ab initio molecular dynamics simulation, we confirm that quantum confinement effects become negligible between 2 and 3 nm in size. In this size domain, specific surface reconstructions occur upon sample dehydrogenation, leading to fullerene-capped structures, or 'bucky diamonds' with absorption spectra similar to the experiment. We finally show that the HOMO and LUMO states are interface states in the reconstructed structures. (c) 2004 Elsevier B.V.. All rights reserved.