The morphology and defects in diamond grains comprising Brazilian carbonado have been investigated using X-ray diffraction, photo- and X-ray luminescence, electron paramagnetic resonance and Raman spectroscopy. Paramagnetic and non-paramagnetic defects in the diamond structure indicate that many of the studied carbonado samples were annealed under mantle conditions, although for a relatively short period of time. Diamond grains show various growth morphological forms with low degrees of dissolution. Individual diamond grains are characterised by a number of important features, such as reentrant apices and incomplete growth layers on faces. We suggest that micron-sized diamond single crystals of predominantly octahedral and cubooctahedral shape grew under conditions of decreasing carbon supersaturation. The temperature decrease serves as a plausible driving force for crystallisation. During the second stage of carbonado formation, mass crystallisation of diamond has occurred. The necessary C supersaturation was likely caused by crystallisation of other minerals, leading to decrease in the volume and/or structure of the parent solution.