The Extreme Environment Diffractometer (EXED) is a new neutron time-of-flight instrument at the BER II research reactor at the Helmholtz-Zentrum Berlin, Germany. Although EXED is a special-purpose instrument, its early construction made it available for users as a general-purpose diffractometer. In this respect, EXED became one of the rare examples, where the performance of a time-of-flight diffractometer at a continuous source can be characterized. In this paper, we report on the design and performance of EXED with an emphasis on the unique instrument capabilities. The latter comprise variable wavelength resolution and wavelength band, control of the incoming beam divergence, the possibility to change the angular positions of detectors and their distance to the sample, and use of event recording and offline histogramming. These features combined make EXED easily tunable to the requirements of a particular problem, from conventional diffraction to small angle neutron scattering. The instrument performance is demonstrated by several reference measurements and user experiments.