Reed Diamond was born in New York City to Allison, an astrologer, and Bob Diamond, a stage manager and director of shows like The Joe Franklin Show. Diamond was educated at the University of North Carolina at Chapel Hill in the 1980s. He also underwent training as a police officer before studying acting at the Juilliard School. He is married (since 2004) to actress Marnie McPhail. His first marriage was with Frederika Kesten which resulted into a divorce in 1997 when Diamond began dating his Homicide co-star Michelle Forbes.
After a series of guest appearances, for instance in Law & Order and Class of '96; movies such as Memphis Belle (1990) and Clear and Present Danger (1994), he got a big break in 1995 as a member of the cast of Homicide: Life on the Street as Det. Mike Kellerman.