Reduction of the graphenic edges of annealed nanodiamond by sodium in liquid ammonia leads to a nanodiamond salt that reacts with either alkyl or aryl halides by electron transfer to yield radical anions that dissociate spontaneously into free radicals and halide. The free radicals were observed to add readily to the aromatic rings of the annealed nanodiamond. Nanodiamonds functionalized by phenyl radicals were sulfonated in oleum, and the resulting sulfonic acid was converted to the sodium salt by treatment with sodium hydroxide. The solubility of the salt in water was determined to be 248 mg/L. Nanodiamond functionalized by carboxylic acid groups could be prepared by reacting 5-bromovaleric acid with the annealed nanodiamond salt. The solubility of the sodium carboxylate in water was found to be 160 mg/L.