Carrier dynamics under interband carrier injection conditions (213 nm) was studied in undoped and boron-doped microcrystalline diamond layers with different grain size. The grain size, determined by scanning electron microscopy and electron backscattered diffraction, varied from 130 μm on the growth side to ∼1–2 μm on the nucleation side of a 1.0 mm-thick undoped layer. Carrier lifetimes measured by differential transmittivity (DT) technique varied from 1 to 4 ns on the growth side to ∼220 ps on the nucleation side. Also the carrier diffusivity was found higher on the growth side. The B-doped layer with 40 μm grain size at the growth side exhibited 380 ps carrier lifetime, which decreased to 130 ps on the nucleation side. Even shorter lifetimes (∼100–200 ps and ∼10 ps, correspondingly) were revealed in this layer by differential reflectivity decay due to impact of subsurface defects. Therefore we conclude that the recombination rate in presence of large grains is dominated by bulk non-radiative traps, as diffusion time of carriers to reach grain boundaries is much longer (few μs). An impact of grain boundaries to recombination is expected in case of smaller grains. Thermal grating decay provided values of thermal diffusivity Dth in the range of 12–6 cm2 s−1, respectively, on the growth and nucleation side of the layers, and its decrease with reduction of grain size was attributed to phonon scattering on grain boundaries.