Metal matrix-impregnated diamond composites are widely used in diamond tool manufacturing. In order to satisfy the increasing engineering requirements, researchers have paid more and more attention to enhancing conventional metal matrices by applying novel methods. In this work, ZrO2 nanoparticles were introduced into the WC–bronze matrix with and without diamond grits via hot pressing to improve the performance of conventional diamond composites. The effects of ZrO2 nanoparticles on the microstructure, density, hardness, bending strength, and wear resistance of diamond composites were investigated. The results indicated that the hardness and relative density increased, while the bending strength decreased when the content of ZrO2 nanoparticles increased. The grinding ratio of diamond composites increased significantly by 60% as a result of nano-ZrO2 addition. The enhancement mechanism was discussed. Diamond composites showed the best overall properties with the addition of 1 wt % ZrO2 nanoparticles, thus paving the way for further applications.