AbstractOvercoming the hardness‐toughness trade‐off in diamonds attracts much interest in physics, chemistry, materials science, and engineering. Recently synthesized nanotwinned diamond composite exhibits massive enhancement in fracture toughness without sacrificing its unprecedented Vickers hardness [Y. Yue et al., Nature 582, 370 (2020)]. Several mechanisms for the toughness enhancement are unveiled based on the edge‐cracked models while the mechanism from Vickers indentation has remained elusive. Here, the energy of nanotwinned diamonds, diamond polytypes, and diamond composites is systematically investigated from Vickers indentation simulation. The results show diamond structures dissipate energy by interface migration, accompanied by the phase transformation from diamond polytypes to the cubic diamond (3C diamond). By tuning the density and distribution of interfaces, the dissipated energy of the diamond is increased to more than twice that of a single‐crystal 3C diamond. This work complements the established mechanisms and provides a universal strategy for toughening diamonds and related materials.