In order to improve the transformation ratio of nanodiamond synthesized by laser irradiation, in this research, we proposed the process that the graphite particles suspended in water was irradiated by laser beam for the first time. The mechanism of phase transformation in the synthesis was investigated from the aspects of experimental process and theoretical analysis. High resolution transmission electron microscopy (HRTEM), scanning electron microscopy (SEM) X-ray diffract meter (XRD) and micro-Raman spectroscopy were used to invetigate the synthesis of nanodiamonds. The results suggest that diamond particles with monocrystal structure or multiple twins’structure be synthesized and the particles size be about 5 nm in the samples. The details are shown as follows: (1) The raw materials’particle size, degree of graphitization and the ratio of hexagonal and rhombohedral graphite were analyzed. (2) Nanodiamonds are synthesized sucessfully when the graphite powders were irradiated by pulsed Nd:YAG laser, pulsed ruby laser or continuous CO2 . (3) The mechanism of the phase transformation in the process was presented. For the laser beam with high power density (≥109 W·cm~(-2)), high temperature, high pressure and high density carbon plasma was generated when laser irradiated the graphite powders, then nanodimonds formed during the cooling process. (4) For the laser beam with power density (10~5～10~6W·cm~(-2)) which can not generate plasma, the raw graphite was molten, and nanodiamond nucleated and grew up from liquid carbon cooled quickly. (5)According to the experimental results, the raw material with samller particle size is favorable to the synthesis of nanodiamond for the laser beam with power density(10~5～10~6W·cm~(-2)) and the coarser particle for the laser beam with high power density(≥109 W·cm~(-2)). (6)The physics of laser beam interacting with materials and several equation for carbon at different structure and state, such as graphite, diamond and liquid carbon, have been introduced. An evaluation of equilibrium state and critical size of nanodiamond is also presented. The novelties of the research: 1) The process that the graphite particles suspended in water was irradiated by laser beam was proposed for the first time. 2) Nanodiamonds are synthesized under the power density as low as 105 W·cm~(-2) for the first time. 3)The suspending liquid is circulated to attain continuous synthesis; 4) The graphite particles are used as the target to improve the conversion ratio of nanodiamond;