Generally speaking, a diminished chord is a chord which has a diminished fifth in it. More specifically, it is a three-note chord consisting of a minor third and diminished fifth above the root - if built on C, a diminished chord would have a C, an E flat and a G flat. The interval between the upper two notes is also a minor third - thus, the chord consists of two minor thirds stacked on top of one another. It resembles a minor triad with a lowered (or diminished) fifth.
In the common practice period, the diminished chord is considered dissonant, or unstable. It lacks tonal center or drive because the diminished fifth symmetrically divides the octave. Adding a further minor third on top of the chord (if built on C, this results in a chord consisting of C, E flat, G flat and B double-flat, the last of which may be enharmonically respelled as A) makes a diminished seventh chord (so called because C to B double-flat is the interval of a diminished seventh). This equivocal chord is ambiguous as to root because a diminished seventh chord built from any note of it produces that same chord. This, combined with the fact that any of its notes may be enharmonically changed, makes it a useful pivot chord for modulation.
A diminished chord occurs in a major scale only on the seventh scale degree; in the key of C, this is BDF. This also occurs in the seventh chord built on the fifth note (that is, the dominant seventh); in C, this is GBDF. The diminished chord on the leading tone can thus function as a dominant seventh and resolve to the tonic chord. The diminished fifth is part of the strong sense of resolution possible in the progression from the dominant seventh to the tonic.
The diminished seventh chord comprises frequencies that are equally spaced when considered on a logarithmic axis, and thus divides the octave into four logarithmically equal portions.
In a twelve tone equal tempered tuning, a diminished chord has 3 semitones between the third and fifth, 3 between the root and third, and 6 between the root and fifth. It is represented by the integer notation 0,3,6. (Courtesy of Wikipedia)
Diminished Chords are created by lowering the 3rd and 5th notes of a major chord by a half-step (one fret). Diminished 7th Chords are created by lowering the 3rd, 5th, and b7th notes of a dominant 7th chord by a half-step (one fret). Click below for the best in free Diminished Chord lessons available on the web.