Particle Size Distribution (PSD) has been studied as an important factor that will affect printing quality in selective laser sintering/melting (SLS/SLM). However, few studies investigated the effects of particle size distribution and associated impact speeds on the quality of printed surfaces in Direct Energy Deposition (DED) processes. Due to the different characteristics of powder bed and powder fed printing mechanism, particle size distribution could be evaluated before the printing but could not be assessed in-situ during the printing process of SLS/SLM. The powder stream of the DED process provides the opportunity to evaluate the PSD in-situ using a novel laser diffraction method. The laser diffraction method was a well-established particle size distribution analysis method for soil granite. It can achieve a fast, accurate, and in-situ analysis but has never been studied in DED printing. In this study, a novel laser diffraction PSD analyzer was proposed. A high-speed camera was applied to investigate the relationship between the impact speed and carrier gas flux. Stainless steel 316L metal powders with different PSDs and impact speeds were DED printed, the surface roughness and tensile strength were measured to evaluate the effects of impact speeds and PSDs on the printing quality. The results showed that impact speed and PSD had considerable influences on the printed surface roughness and tensile strength of printed parts. This study paves the way for adopting laser diffraction as an in-situ monitoring tool for the DED processes.