This research explores the complex influence of nitrogen concentration and substrate temperature on the resultant properties of polycrystalline diamond (PCD) films grown by microwave plasma chemical vapor deposition (CVD). In particular, we investigated the growth parameters to find the exact conditions for changing the morphology of the resulting film from microcrystalline (MCD) to nanocrystalline (NCD). A series of 2 µm-thick polycrystalline diamond films was grown on Si substrates in methane-hydrogen–nitrogen gas mixtures with varied: (i) nitrogen concentration (0–2 %) and (ii) substrate temperature (700–1050 °C). Comprehensive characterization techniques, including scanning electron microscopy (SEM), micro-Raman spectroscopy, and X-ray diffraction, were employed to assess the morphological, structural, and spectroscopic properties of the films. The study reveals that even minor additions of nitrogen significantly modulate secondary nucleation, impacting both film morphology and phase composition. Furthermore, substrate temperature emerges as another critical parameter, influencing the growth kinetics and crystallite size. The comparison of the characteristics of grown PCD films allowed us to find conditions for the formation of NCD films with minimal surface roughness and maximal growth rate: nitrogen concentration [N2] ≈ 0.2–0.5 % and temperature T ≈ 850–900 °C. These findings can be used to optimize the CVD synthesis parameters of PCD films for applications as protective or friction-reducing layers, as well as for superhard cutting tools and optical devices.