Diamond exhibits unusually favorable properties in terms of mechanical strength, thermal conductivity, and optical transmission, which make this material highly attractive for infrared (IR) applications that involve severe heat loads. Until recently, diamond has been available only in the form of relatively small crystals, but this situation is evolving rapidly as a result of major advances in the art of growing diamond by chemical vapor deposition (CVD) techniques. Success in producing large, free-standing deposits having properties that match those of natural diamond has stimulated enormous interest and has given rise to much speculation about CVD diamond as an 'ideal' optical material for a wide range of engineering uses in the IR; the objective of this paper is to present a critical assessment of some of the issues that arise in connection with using diamond as a window material for high-power lasers. In a high-average-power environment, defect-free single-crystal diamond, preferably (111)-orientated to avoid anisotropic elastic responses, may indeed provide an outstanding window-material candidate for operation in the near IR. The power-handling capability, however, will be limited by thermal lensing, which can only be eliminated if absorption-free anti-reflection coatings become available; another limitation concerns the edge heat-transfer coefficient, which must be substantially above the state of the art to avoid nullifying the advantage derived from the superior thermal conductivity of diamond at low temperatures. Pressure-induced and thermally induced stresses are of no consequence, but diamond windows are not particularly promising for very-high-peak-power operation considering the non-linear index of refraction, which may cause highly damaging self-focusing effects.