The work aims to improve microhardness and bonding strength of nano-diamond coating by changing process parameters of nano-diamond coating which was prepared in the method of suspension plasma spraying. Numerical simulation was applied to residual stress of nano-diamond coating using finite element software ANSYS. Finite element analysis model and heat conduction equation were established for nano-diamond coating. The effects of coating thickness and cooling rate on residual stress of the nano-diamond coating were discussed. Surface of the nano-diamond coating was analyzed by scanning electron microscope, and microhardness and bonding strength were measured by microhardness tester and surface scratch tester. Principal stress of the nano-diamond coating was tensile stress, and the maximum principal stress first increased, then decreased and finally increased as the coating thickness increased. The maximum shear stress of the coating was transferred from coating surface to coating interface as the coating thickness increased. Moreover, the maximum shear stress first decreased and then remained stable. For the bulk coating, coating interface or coating surface, the maximum principal stress and the maximum shear stress decreased linearly with the increase of coating temperature. The maximum principal stress was concentrated around the coating while the shear stress was distributed on the coating surface. The surface of the nano-diamond coating was smooth because its smooth surface consisted of compact flat particles through a large number of nanoscale particles. The microhardness and bonding strength of the 0.1 mm thick nano-diamond coating prepared provided with proper process parameters is about 150HV and 9 N, respectively.