An electroformed diamond tool with superior proportional limit and wear resistance was developed for the microgrinding of hard and brittle materials, in which a tool of small diameter is rotated at a high speed. A plating rig that can fabricate an electroformed diamond tool with fine diamond grains and an electrodeposited Ni grain size less than 2 nm was newly developed. A thermal etching for roughening diamond grain surfaces was conducted to increase gripping strength between diamond grains and the bond material Ni of the tool. In addition, an annealing process to synthesize the intermetallic alloy Ni3P was used on the tool not only to increase the hardness of the bond material but also to increase the proportional limit of the tool. It was verified through the bending test that both the Young's modulus and proportional limit of the tool increased to about 40 GPa and 1.5 GPa, respectively, using thermally etched diamond grains and annealing tools, compared with those of electroformed diamond tools fabricated using conventional techniques.