Crack-free (111) homoepitaxial diamond films were grown on Ni-coated diamond substrates by microwave plasma chemical vapor deposition. After diamond deposition, the Ni islands with a size of 50-1000. nm were formed and embedded underneath the diamond films. The tensile stress in the diamond films evaluated with micro-Raman spectroscopy can be significantly reduced with the embedded Ni islands, which allows the growth of ~. 5. μm thick crack-free (111) homoepitaxial diamond films with a good quality, compared with those directly deposited on substrates without coating. •We synthesized the crack-free (111) homoepitaxial diamond films on Ni-coated diamond.•The MPCVD process can form the Ni islands in hundreds of nanometers on substrate.•Ni coating on substrate can reduce the tensile stress in the diamond films.•Surface cracking on thicker films can be retarded by Ni coating on diamond substrate.