This article reports findings when using a molybdenum–tungsten (MoW) interlayer for diamond thin film deposition on steel substrates. The main focus was on the postdeposition stress within the diamond films and its impact on the coating's tribological properties. The effect of MoW interlayer thickness and the effect of chemical vapor deposition (CVD) process temperature have been investigated. Nanocrystalline diamond films were deposited on steel substrates with MoW interlayers (thickness of 1.1, 4.5, and 8.3 μm) at two different deposition temperatures (650 and 875 °C). It was found that when depositing good quality diamond films on steel substrates, increasing interlayer thickness and decreasing CVD process temperature have to be jointly considered to obtain the optimal result. The diamond-coated steel substrates with the 8.3 μm interlayer deposited at the lower CVD processing temperature exhibited the least residual stress combined with excellent mechanical properties.