"Diamond" was ordered on 2 February 1931 under the 1930 Naval Estimates, and was laid down at Vickers-Armstrong's yard at Barrow-in-Furness on 29 September 1931. She was launched on 8 April 1932 and completed on 3 November 1933, at a total cost of £223,509, excluding equipment supplied by the Admiralty, such as weapons, ammunition and wireless equipment. The ship was initially assigned to the 1st Destroyer Flotilla in the Mediterranean and made a brief deployment to the Persian Gulf and Red Sea in September–November 1933. "Diamond" was refitted at Devonport Dockyard between 3 September and 27 October 1934 for service on the China Station with the 8th (later the 21st) Destroyer Flotilla and arrived there in January 1935, where she remained for the next four years.