Polycrystalline diamond compact (PDC) is one of the most important superhard materials used in demanding cutting and drilling applications, and the purity of diamond powder plays a decisive role in controlling its microstructure and performance. In this study, a representative diamond powder was divided into two groups: a purified powder (P1) and an impurity-rich powder (P2), distinguished by whether a dedicated acid and alkali treatment was applied prior to use. Testing revealed that the aggregate impurity content (surface and interior) in P2 was approximately twice that of P1. One hundred PDC samples were fabricated for each group (denoted as S1 and S2) using these powders. The product qualification rate of S1 exceeded 90%, whereas that of S2 was dropped to around 70%. Elements such as Fe and Si enriched at defects in S2, accounting for this decrease. Microstructural characterization using XRD, XPS and SEM/EDS tests demonstrated that the S2 samples prepared from impurity-rich powder exhibited pronounced grain size heterogeneity and increased cobalt content, in contrast to the uniform diamond framework observed in S1. Mechanical testing (including VTL, impact, and thermal expansion tests) showed that impurity-rich PDCs have reduced wear resistance (by about 6%), degraded impact toughness (by 5–9%) and significantly lower thermal stability, with the thermal failure temperature decreasing by around 100 °C. Further grain size analyses indicate that the presence of metallic impurity-derived compound catalysts (e.g., Fe₃W₃C) enhances nitrogen solubility and activity during sintering, and triggers abnormal grain growth (AGG). These impurity-driven growth instabilities weaken D D bonding and ultimately deteriorate PDC performance.