We investigate the aerobic oxidation of high-pressure, high-temperature nanodiamonds (5-50 nm dimensions) using a combination of carbon and oxygen K-edge X-ray absorption, wavelength-dependent X-ray photoelectron, and vibrational spectroscopies. Oxidation at 575 °C for 2 h eliminates graphitic carbon contamination (>98%) and produces nanocrystals with hydroxyl functionalized surfaces as well as a minor component (<5%) of carboxylic anhydrides. The low graphitic carbon content and the high crystallinity of HPHT are evident from Raman spectra acquired using visible wavelength excitation (λexcit = 633 nm) as well as carbon K-edge X-ray absorption spectra where the signature of a core-hole exciton is observed. Both spectroscopic features are similar to those of chemical vapor deposited (CVD) diamond but differ significantly from the spectra of detonation nanodiamond. The importance of these findings to the functionalization of nanodiamond surfaces for biological labeling applications is discussed.