Aiming at the long-standing difficulties in polishing polycrystalline chemical vapor deposition (CVD) diamond wafers efficiently and safely, a thermo-chemical polishing (TCP) method of molten iron erosion polishing (MIEP) was proposed, thus achieving rapid improvement of the surface roughness (Ra) for polycrystalline diamond wafers. By designing the experimental equipment and parameters, the diamond wafers were immersed in molten iron to be polished. The experimental results of surface roughness measured by white light interferometer showed that the original surface roughness (Ra, ∼30.850 μm) was reduced to ∼5.204 μm in 10 s of MIEP. Followed by 10 min of mechanical polishing (MP) further polishing, the average Ra was reduced to ∼14 nm. The material removal rate (MRR) of the MIEP reached 46,800 μm/h, and the average polishing rate (PR) reached 157.395 μm/min. The thorough analysis of Raman and X-ray photoelectron spectroscopy (XPS) results revealed the material removal mechanism as the dissolution and the diffusion of carbon atoms into molten iron, which caused the high MRR of this new polishing method.