Microstructural evolution of nanocrystalline diamond (NCD) nanoneedles owing to the addition of methane and nitrogen in the reactant gases is systematically addressed. It has been determined that varying the concentration of CH in the CH/H/N plasma is significant to tailor the morphology and microstructure of NCD films. While NCD films grown with 1% CH in a CH/H/N (3%) plasma contain large diamond grains, the microstructure changed considerably for NCD films grown using 5% (or 10%) CH, ensuing in nanosized diamond grains. For 15% CH-grown NCD films, a well-defined nanoneedle structure evolves. These NCD nanoneedle films contain sp phase diamond, sheathed with sp-bonded graphitic phases, achieving a low resistivity of 90 Ω cm and enhanced field electron emission (FEE) properties, namely, a low turn-on field of 4.3 V/μm with a high FEE current density of 3.3 mA/cm (at an applied field of 8.6 V/μm) and a significant field enhancement factor of 3865. Furthermore, a microplasma device utilizing NCD nanoneedle films as cathodes can trigger a gas breakdown at a low threshold field of 3600 V/cm attaining a high plasma illumination current density of 1.14 mA/cm at an applied voltage of 500 V, and a high plasma lifetime stability of 881 min is evidenced. The optical emission spectroscopy studies suggest that the C, CN, and CH species in the growing plasma are the major causes for the observed microstructural evolution in the NCD films. However, the increase in substrate temperature to ∼780 °C due to the incorporation of 15% CH in the CH/H/N plasma is the key driver resulting in the origin of nanoneedles in NCD films. The outstanding optoelectronic characteristics of these nanoneedle films make them suitable as cathodes in high-brightness display panels.