Diffraction radiation, emitted from ralativistic electron bunches, has the potential applications of non-intercepting electron beam diagnostics. The electron longitudinal distribution in a bunch can be obtained from the coherent diffraction radiation spectrum; the beam transverse properties, such as beam size, divergence and emittance, can be measured through the analysis of the angular distribution of the diffraction radiation. The design study and initial experimental results at the Vanderbilt FEL facility will be presented.