The development of processes for depositing diamond in large sizes offers the promise of optics with a combination of intrinsic superior properties. These properties include optical transmission over a large wavelength range due to a wide electronic bandgap and forbidden first order phonon induced absorption, the ability to withstand high laser powers due to high optical transmissivity and high thermal conductivity, and great mechanical strength due to large elastic moduli. Polycrystalline diamond of high optical quality can now be produced by various enhanced chemical vapor deposition (CVD) techniques in sizes many cm in diameter and in thickness of the order of one mm. Key to the use of diamond as an optical material is our ability to evaluate the defects that influence the properties. A variety of techniques are used to investigate the defect content. These include optical absorption spectroscopy, Raman spectroscopy, transmission electron microscopy, electronic carrier lifetime, and thermal conductivity. Use of CVD diamond in an aircraft environment of rain and sand erosion is currently limited by the strength of the material which is in the range 200 to 400 MPa. Despite its lower than expected strength, diamond has excellent resistance to thermal shock. Even if all of the technical limitations for producing high quality CVD diamond for optical applications are overcome, the cost of production is still very high; large scale use will require a significant drop in price. A particular impediment is the high cost of polishing diamond.