Diamonds have continuously been discovered in the field since 1906, including the Strawn-Wagner Diamond. The site became a state park in 1972 after the Arkansas Department of Parks and Tourism purchased the site from the Arkansas Diamond Company and Ozark Diamond Mines Corporation, who had operated the site as a tourist attraction previously.
The Crater of Diamonds volcanic pipe is part of a 95-million-year-old eroded volcano. The deeply sourced lamproite magma, from the upper mantle, brought the diamonds to the surface. The diamonds had crystallized in the cratonic root of the continent long before and were sampled by the magma as it rose to the surface.
The geology of the area and the diamond formation process itself were the subjects of the Ph.D. dissertation of Roland Everett Langford in 1973 from the University of Georgia; in it, he proposed a gas phase reaction from the reduction of carbon monoxide and carbon dioxide in the upper mantle. The dissertation was on display at the state park for many years.
More recent research by geologist Dennis Dunn (Ph.D. dissertation 2002) established that the diamondiferous epiclastic rocks range from olivine lamproite to phlogopite and olivine-rich tuffs. Mantle xenolith chemistry were used to derive maximum pressures of ~5 GPa and temperatures of 1000 °C for the upper mantle origin of the lamproitic magma.
The lamproite diamond source is unusual, as almost all diamonds are mined from kimberlite and from alluvial deposits of diamonds weathered from kimberlite. The most prominent lamproite diamond source is the Argyle diamond mine in Australia.