Synthesis of fullerenes using a standard dc arc evaporation of composite graphite anode containing 0–100 wt % of diamond is reported. The benzene soluble material‐to‐soot weight ratioWincreases linearly with increasing diamond compositionCDup to 45 wt %. At 50 wt %,Wis 1.86 times as large as that for pure graphite. Above 50 wt %,Wturns to decrease linearly. It is shown that diamond and graphite contribute independently toW. The graphite contribution to the linear behaviors is discussed in terms of kinetics of the transformation from planarsp2network to quasitetragonalsp3hybridization through quasiplanarsp2hybridization during the dc arc. Furthermore, a new type of encapsulation compound, single crystals of diamond encapsulated in multiwalled carbon nanocages, is presented. ©1995 American Institute of Physics.