Carbon-based nanomaterials, such as carbon nanotubes, are well-known for their unique physical properties. They have attracted interest as reinforcing fillers because of their superb mechanical properties (Young's modulus >= 1 TPa and tensile strength = 100-150 GPa). However, the success of the reinforcement has been limited because of their tendency to form agglomerates in polymer matrices. We report the excellent reinforcement properties of polymer nanocomposites by the incorporation of nanodiamond (ND). ND has been expected to offer polymer nanocomposites optimal properties because of its smooth surface and excellent optical, mechanical, and thermal properties, which can approach the values of single diamond crystal. We prepared poly(vinyl alcohol) (PVA)/ND nanocomposites by a simple casting method from aqueous medium and achieved the high dispersibility of ND in the PVA matrices. The resulting nanocomposites had excellent properties derived both from ND and PVA. The Young's modulus of the nanocomposites in particular increased 2.5 times compared with that of PVA film with only 1 wt % ND loading. For the thermal properties, the thermal conductivity of the nanocomposites increased dramatically, much above the calculated values, especially at a low content of ND. Furthermore, it was revealed that PVA/ND nanocomposites remained high transparency of PVA even if ND particles were imparted. We anticipate that ND will be able to compete as a nanofiller against conventional carbon-based nanofillers for polymer composites, and it is possible their reinforcement properties will be extended in the future.