A systematic study has been undertaken of the influence of diffraction on ultrasonic absorption coefficient and phase velocity measurements made using the through‐transmission substitution technique. A diffraction correction model dealing explicitly with the interaction of the sample with the plane‐ and edge‐wave components of the acoustic field of a piston transducer is introduced. The National Physical Laboratory ultrasonic materials characterization facility has been used to validate the model using a pulsed technique covering the frequency range 1–15 MHz. In the validation, absorption coefficient and phase velocity measurements are presented for test specimens of cross‐linked polystyrene of various thickness. Strong diffraction effects have been demonstrated in the measurements, particularly for the absorption coefficient where measured values can be typically a factor of 2–3 higher than plane‐wave values. Excellent agreement is demonstrated between theory and measurement for both absorption and phase velocity under a wide range of measurement conditions.