Nanodiamond (ND) is surrounded by layers of graphite on its surface. This unique structure feature creates unusual fluorescence spectra, which can be used as an indicator to monitor its surface modification. Meanwhile, the impurity, nitroso (CNO) inside the ND can be photolyzed by two-photon absorption, releasing NO to facilitate the formation of a s p3 diamond structure in the core of ND and transforming it into a s p2 graphite structure. Such a conformational transition enlarges the size of ND from 8 to 90 nm, resulting in a popcornlike structure. This transition reaction may be useful as nanoknives in biomedical application.