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A blood diamond is also frequently called a war or conflict diamond. It is a diamond that is sold to finance acts of terrorism or violence, including civil wars. Trading these gems in this manner has become a global problem and it is largely concentrated in Africa. The United Nations has enacted resolutions designed to combat sales of blood diamonds.

Some of the human rights abuses that result from blood diamonds are child labor, slave labor, and environmental destruction. Rebel groups force individuals to work in diamond pits, with the mined gems sometimes being sold in developed countries. These gems originate in areas that are controlled by parties that oppose legitimate forms of government. Their sales fund military actions against those legitimate governments.

The Sierra Leone conflict in the late 1990s caused blood diamonds to gain national attention. Over an eight year period, rebels in the area systematically amputated human limbs. Liberian President Charles Taylor was charged with purchasing diamonds from these rebels in exchange for arms used in the horrific amputations. At that time, almost 14 percent of global diamond production was used to fund brutal civil wars. In Angola, a rebel militant group called Unita received almost $1.5 billion from diamonds mined within its controlled areas. Unita used this money to fight a civil war that resulted in 500,000 casualties.

The Kimberly Process Certification System was developed in July 2000 in response to the blood diamond trade. Countries that participate in this system vouch that the rough diamonds mind from their borders are not used to directly finance any rebel militias. However, some estimates still attribute as much as 30 percent of some diamond mine output to illegal smuggling. Under the System of Warranties, the diamond industry claims that its diamonds do not come from regions engaged in conflict. However, only a small majority of retailers have formal policies regarding compliance with the Kimberly Process.