We report a new illusion in which the edges of diamonds placed at the intersections of grids are perceived to be jaggy (the jaggy diamonds illusion). Interestingly, the illusion disappears when the stimulus is rotated by 45 degrees, when the stimuli are observed at a close distance, and on the diamond at which the observers stare. Luminance contrast between diamonds, grids, and background is a strong determinant for this illusion.