Natural-colored diamonds are created in the same fashion as the traditional white diamonds with one unique difference. When foreign particles are trapped during the crystallization process, it affects and alters the chemical process, therefore creating the unique colors.
Fancy colored diamonds will present in pink/red, blue, green, yellow/orange, and purple/violet.
With pink/red diamonds, intense heat and pressure cause the lattice to absorb green light rays. Boron is the active ingredient in blue diamonds, bonding with carbon to absorb red, yellow and green light. In green diamonds, the stones absorb naturally occurring radiation from the soil, which gives them reflective properties.
Purple/violet colored diamonds are also the product of lattice distortion. New evidence however, suggests that the presence of hydrogen may contribute to their shading. In yellow/orange diamonds, nitrogen atoms within the gems have assembled themselves in a way that blue light is absorbed and yellow hues are reflected.
In most cases when you see a colored diamond, it has been heat treated to enhance the natural hues. Natural black diamonds are grayer in color, but the heating process enhances the hue to a true black. This process makes the stone no less a diamond and actually brings out the natural hues and intensifies the dazzling color spectrum.