In this paper, prospects of using diamond with NV− centers as a gain medium have been studied. Spectroscopic characterization of NV− centers in diamond as well as absorption saturation and pump-probe experiments have been carried out. Absorption and emission cross-sections were estimated to be 2.8 × 10<sup>-17</sup> cm<sup>2</sup> and 4.3 × 10<sup>-17 </sup>cm<sup>2</sup> at the maximum of absorption and emission bands, respectively. It was observed from emission spectra under pulse excitation that some NV− are photoionized to NV<sup>0</sup> centers with ZPL at 575 nm. Room temperature luminescence lifetime of NV− centers was measured to be 12ns, which is close to the previously reported lifetime in bulk diamond (~13ns). Saturated transmission was only about 11% of calculated values even at energy fluence much higher than the saturation flux. Two excited state absorptions (ESAs) with different relaxation times (“fast-decay” and “slow-decay with relaxation times of ~500 ns and several tens of microseconds, respectively) were revealed in transmission decay kinetics at 632 nm. Kinetics of transmission at 670 nm was dominated by “slow-decay” ESA process. Kinetics of <i>dk/k<sub>0</sub> </i>in shorter wavelength were strongly dominated by “fast-decay” ESA process. These results definitively indicate that stimulated emission of NV− centers is suppressed by photoionization and ESAs and the possibility of diamond lasers based on NV− centers is low.