Abstract Machining tools electroplated with coated diamond abrasives are widely used because of their high wear resistance. However, the inconsistent quality caused by coating failure has hindered tools’ performances and service lives. In the present work, experimental investigation through electrochemical approach was conducted on a coating electrolessly plated on diamond grits. A newly designed working electrode with nickel-phosphorus alloy coating was fabricated. Subsequently, immersion test, potentiodynamic polarization, and linear polarization resistance (LPR) and open circuit potential (OCP) monitoring were performed on this electrode, in order to reveal insight from the failure mechanisms of coatings. Morphological characterization was carried out before and after both the potentiodynamic polarization experiments and immersion test. The results showed that, in a low-concentration (60 g/L nickel sulfamate) bath, the coating cracked and stripped off because of the current assisted breakthrough of pinholes, while the coating has less damage in the high-concentration (300 g/L nickel sulfamate) bath because of an extra passivation stage at lower potential (−0.30 V versus OCP). The increase in OCP and decrease in corrosion rate over time indicated the continuous coating cracking and exposure of the nobler diamond substrate. LPR and OCP monitoring is an effective approach to evaluate the coating durability before the coated diamond grits are actually used in wire saw manufacturing. The electrochemical characterization methods used in this work can be applied to other core-shell systems with metal coatings and particulate substrates.