The majority of prehistoric lithic artefacts were fashioned from rocks and minerals no harder than quartz, and there is not prehistoric evidence for the working of harder materials, such as corundum and diamond. The earliest physical evidence for the corundum (ruby, sapphire) is thought to be the abrasive grit recovered from Bronze Age Minoan quartz beads (c. 1700-1500 BC), while diamond is thought to have been used no earlier than 500 BC, in India. Here we show that corundum was worked c. 4000-3500 BC during the Neolithic period in China, in the form of polished axes from Liangzhu and Sanxingcun cultures. We also present physical evidence that later Liangzhu axes (c. 2500 BC), made from the same previously undescribed rock whose most abundant component is corundum, were polished to a mirror-like finish with a diamond abrasive. Our findings, which are the first to support the use of corundum and diamond in a prehistoric context, may also help to explain the trademark feature of the Neolithic in China, vast quantities of finely polished nephrite jade artefacts.