Diamond was born in New York City to a rich Jewish household. He attended Vassar College in Poughkeepsie, New York for six months. In 1979, Diamond co-founded the band The Young Aborigines. In 1981, Adam Yauch, aka MCA, a friend and follower of the band, became their bass player, and on the suggestion of their then-guitar player, John Berry, the band changed their name to the Beastie Boys. By 1983, Adam Horovitz (Ad-Rock) joined, and their sound began to shift away from punk to hip hop.
In 1992, Mike D founded the Beastie Boys' now-defunct record label Grand Royal Records. He is also interested in interior decoration, and designed Brooklyn-themed toile wallpaper; it was used in the renovation of the Marquee nightclub in Chelsea, which reopened in January 2013.
A year after the passing of Yauch in 2012, Mike D told Rolling Stone he was "excited about making new stuff again" and released "Humberto Vs the New Reactionaries (Christine and the Queens Remix)" in July 2013. A remix of Yoko Ono Plastic Ono Band's "Bad Dancer" by Mike D and Adam Horovitz was streamed online in August 2013. The pair is credited with “additional beats, programming and other curve balls.” In October 2014, Mike D stated that he had been working in the studio with American rock band Portugal. The Man as a producer.