We unveil the diamondization mechanism of few-layer graphene compressed in the presence of water, providing robust evidence for the pressure-induced formation of 2D diamond. High-pressure Raman spectroscopy provides evidence of a phase transition occurring in the range of 4-7 GPa for 5-layer graphene and graphite. The pressure-induced phase is partially transparent and indents the silicon substrate. Our combined theoretical and experimental results indicate a gradual top-bottom diamondization mechanism, consistent with the formation of diamondene, a 2D ferromagnetic semiconductor. High-pressure x-ray diffraction on graphene indicates the formation of hexagonal diamond, consistent with the bulk limit of eclipsed-conformed diamondene.