The interaction of ultra-nanocrystalline diamond (UNCD) with neural stem cells (NSCs) has been studied along with its surface modification in order to improve its function as a biomaterial. Hydrogen- and oxygen-terminated UNCD films were compared with standard grade polystyrene in terms of their impact on the growth, expansion and differentiation of NSCs. When NSCs were cultured on these substrates in low serum and without any differentiating factors, hydrogen-terminated UNCD films spontaneously induced cell proliferation and neuronal differentiation. Oxygen-terminated UNCD films were also shown to further improve neural differentiation, with a preference to differentiate into oligodendrocytes. Hence, controlling the surface properties of UNCD could manipulate the differentiation of NSCs for different biomedical applications. These observations raise the potential for the use of UNCD as a biomaterial for central nervous system transplantation and tissue engineering.