Density functional theory calculations have been performed to compute the beat of formation of nanoscale graphene sheets and nanodiamonds with up to similar to 450 carbon atoms. The accuracy of the computational scheme has been validated by calculating the heat of reaction of three precursor reactions between small SP2 and SP3 hydrocarbon molecules. By comparing the heat of formation for nanographites and nanodiamonds of different sizes, an sp(3)-to-SP2 crossover was estimated to occur at about n = 1060 (d similar or equal to 2.1 nm). The size-dependence of the structural and electronic properties of hydrogenated nanodiamonds has also been discussed. (c) 2007 Elsevier B.V. All rights reserved.