Diamonds do not show all of their beauty as rough stones; instead, they must be cut and polished to exhibit the characteristic fire and brilliance that diamond gemstones are known for. Diamonds are cut into a variety of shapes that are generally designed to accentuate these features.

Diamonds which are not cut to the specifications of Tolkowsky's Round Brillant shape (or subsequent variations) are known as "fancy cuts." Popular fancy cuts include the baguette (from the French, meaning rod or loaf of bread), marquise, princess cut (square outline), heart , briolette (a form of the rose cut), and pear cut . Newer cuts that have been introduced into the jewelry industry are the "cushion " "radiant "(similar to princess cuts, but with rounded edges instead of square edges) and "Asscher" cuts. Many fancy colored diamonds are now being cut according to these new styles. Generally speaking, these "fancy cuts" are not held to the same strict standards as Tolkowsky-derived round brilliants and there are less specific mathematical guidelines of angles which determine a well-cut stone. Cuts are influenced heavily by fashion: the baguette cut—which accentuates a diamond's luster and downplays its fire—was all the rage during the Art Deco period, whereas the princess cut cut—which accentuates a diamond's fire rather than its luster—is currently gaining popularity.

The princess cut is also popular amongst diamond cutters: of all the cuts, it wastes the least of the original crystal. The past decades have seen the development of new diamond cuts, often based on a modification of an existing cut. Some of these include extra facets. These newly developed cuts are viewed by many as more of an attempt at brand differentiation by diamond sellers, than actual improvements to the state of the art.