The performances of metal-bonded diamond cutting tools were investigated using iron alloys as the bonding matrix. The effects of titanium coating on the diamond grit and matrix composition on the properties of the diamond tools were systematically studied. The diamond tools were fabricated by pressureless-sintering the preformed powder compacts in vacuum at 1100 degreesC. With the development of an interlayer composed of titanium and carbon, the degradation of diamond grits during high temperature sintering was impeded and the interfacial cohesion strength between diamond grits and matrix was enhanced. Results of cutting tests indicated that optimal diamond tools could be fabricated using titanium-coated diamond grits and an iron matrix, which had a more than 10-fold increase in tool life compared with a commercial hot-pressed counterpart.