1 November 2016 Last updated at 08:46 GMT
Lots of sparklers and fireworks were set off to celebrate the Hindu festival but the smoke caused heavy smog.
Air pollution is now around 30 times higher than the World Health Organisation's recommended level.
On Monday morning, visibility across the city was very low and people there were advised to stay indoors.
Delhi is home to 16 million people and is the 11th most polluted city in the world, according to a report released by the WHO.
On the days before the festival, the air quality there was already bad.
Read Newsround's guide all about the Indian festival of Diwali.
Diwali celebrations have caused huge amounts of air pollution in the Indian capital, Delhi.