The presence of large amounts of nondiamond carbon in detonation-synthesized nanodiamond (ND) severely limits applications of this exciting nanomaterial. We report on a simple and environmentally friendly route involving oxidation in air to selectively remove sp(2)-bonded carbon from ND. Thermogravimetric analysis and in situ Raman spectroscopy shows that sp(2) and sp(3) carbon species oxidize with different rates at 375-450 degrees C and reveals a narrow temperature range of 400-430 degrees C in which the oxidation of sp(2)-bonded carbon occurs with no or minimal loss of diamond. X-ray absorption near-edge structure spectroscopy detects an increase of up to 2 orders of magnitude in the sp(3)/sp(2) ratio after oxidation. The content of up to 96% of sp(3)-bonded carbon in the oxidized samples is comparable to that found in microcrystalline diamond and is unprecedented for ND powders. Transmission electron microscopy and Fourier transform infrared spectroscopy studies show high purity 5-nm ND particles covered by oxygen-containing surface functional groups. The surface functionalization can be controlled by subsequent treatments (e.g., hydrogenization). In contrast to current purification techniques, the air oxidation process does not require the use of toxic or aggressive chemicals, catalysts, or inhibitors and opens avenues for numerous new applications of nanodiamond.