The sintering behaviour of prealloyed powder compacts has been studied as a function of the sintering atmosphere in free sintering experiments. Atmospheres with different hydrogen/nitrogen ratios and even vacuum have been used in the sintering cycles. Powder compacts with and without diamond additions have been sintered. Three different grades of diamond were used in the experiments, all of them synthetic manmade diamond. Two had different levels of metallic inclusions and one was coated with Ti. The interaction between bond/atmosphere/diamond has been characterised analysing the density, microstructure, bend strength and degradation of the diamonds after dissolving the matrix. Diamonds from atmospheres with low hydrogen content show evidence of strong degradation. Moreover, any diamond additions strongly decrease the strength of the bonds, acting as defects. The strength is also affected by the sintering atmosphere and sintering temperature but not significantly by the type of diamond.