Spherical and polyhedral carbon onions prepared from diamond nanoparticles are investigated by high-resolution transmission electron microscopy (HRTEM), Raman spectroscopy, and electron spin resonance (ESR). HRTEM and Raman studies show that, as a result of thermal annealing, diamond nanoparticles are transformed into spherical onions, and finally into polyhedral onions by the progress of graphitization. ESR spectra for spherical onions show only a narrow signal corresponding to dangling bond spins associated with structural defects. In contrast, for polyhedral onions, an additional broad signal due to conduction electron spins emerges. These results combined with previous results of electron energy-loss spectroscopy suggest that the spherical onions consist of small domains of the graphitic sp(2) sheets with dangling bond defects in the peripheries. pi electrons in spherical onions are thus localized in the small domains and do not act as conduction electrons. In the polyhedral onions, the graphitization proceeds further, resulting in the decrease in the number of dangling bonds and the delocalization of pi electrons.