Our group developed the first inversion-type p-channel diamond metal–oxide–semiconductor field-effect transistor, which featured normally off properties by employing water vapor annealing treatments for the oxygen-terminated diamond surface. Despite the comprehensive device-grade characterization, the impact of water vapor annealing treatments on the Al2O3/diamond interface has not been investigated in detail. In this work, we fabricated four diamond metal–oxide–semiconductor (MOS) capacitors without and with water vapor annealing treatments for various times of 30 min, 1 h, and 2 h and conducted the cycle capacitance–voltage (C–V) and simultaneous C–V measurements. The large cycle C–V shift existed in the sample without water vapor annealing treatment, whereas it was significantly suppressed by water vapor annealing treatments, indicating the effective passivation of the traps with long time constants. The simultaneous C–V results showed a similar trend that the frequency dispersion of the simultaneous C–V was dramatically reduced with water vapor annealing treatments, and the interface quality of Al2O3/diamond had a slight dependence on the water vapor annealing times. Based on simultaneous C–V measurements, the interface state density (Dit) at an energy level of 0.2–0.6 eV from the valence band edge of diamond was extracted for the different MOS capacitors. The Dit was reduced by one order of magnitude with water vapor annealing treatments, and it almost did not change with the water vapor annealing times. Besides, the flat band voltage shift and effective fixed charge were also dramatically reduced by water vapor annealing. The possible physical reason for the interface improvement by water vapor annealing treatments was discussed.