In this paper, a low-temperature stress-free electrolytic nickel (EL) deposition process with added dispersed diamond nanoparticles (diameter < 0.5 μm) is developed to synthesize Ni-diamond nanocomposite for fabricating electrothermal microactuators. Device characterization reveals dramatic performance improvements in the electrothermal microactuator that is made of the nanocomposite, including a reduction in the input power requirement and enhanced operation reliability. In comparison with the microactuator made of pure nickel, the nanocomposite one can save about 73% the power for a 3 μm output displacement and have a longer reversible displacement range, which is prolonged from 1.8 μm to more than 3 μm. Furthermore, the nanocomposite device exhibits no performance degradation after more than 100 testing cycles in the reversible regime. The enhancements increase with the incorporation of the nanodiamond in a nickel matrix, so the Ni-diamond nanocomposite has potential for application in MEMS fabrication.