Analysis of diamond short channel effect is carried out for the first time. 70 nm channel diamond metal-insulator semiconductor field-effect transistor is realized by utilizing new FET fabrication process on the hydrogen-terminated surface conductive layer. This FET is the shortest gate length in diamond FETs. FETs with thick gate insulator of 35 nm show significant threshold voltage shift and degradation of subthreshold slope S by the gate refining. This phenomenon occurs due to the penetration of drain field into channel. However, the degradation of subthreshold performance and threshold voltage shift are hardly observed in 0.17 µm FET with thin gate insulator 15 nm in thickness.