Khan continued his rehabilitation from successive defeats against Lamont Peterson and Danny Garcia by making a victorious return to Britain after over two years away, but failed to convince he would soon be a world champion again in the process.
Despite taking more rounds with his trademark hand speed and good movement, some of his old weaknesses were exposed by the rugged Mexican veteran.
This was never moreso the case than in round four, when Khan’s dominance appeared to reach a peak only for a glancing left followed by a much stronger one which dropped the Brit to the canvas.
Khan answered the count and continued to rack up rounds as Diaz’s one-dimensional approach lacked a clinical finish, but the 33-year-old came close on a number of occasions in the ‘championship rounds’.
Diaz hurt Khan more than once in the last three, but the Bolton boxer to his credit showed a degree of resilience seldom give him credit for.
Nonetheless, only his earlier showings enabled him to cling onto the edge over 12 rounds with the three ringside judges all favouring Khan by 114-113, 115-113 and 115-112.
The Eurosport-Yahoo! scorecard had ‘King’ Khan up by one round too, 115-114, though the advantage was four rounds strong before the closing rounds.
Khan said afterwards: "He's a tough guy, he's been in many top fights and we knew he would want to win the fight. I listened to Virgil though and we got the win.
"I remember everything that happened in the fourth round - I was off balance. I lost my stance and got caught. But we will go back to the gym and work on that.”
On the homecoming, Khan was pleased with the atmosphere but hinted that it may be the last time he competes on British soil.
"Fighting back in the UK was amazing,” Khan said. “The fans were great and they were behind me all the way."
"I wish I could fight here more often but it may not be possible. If this is my last fight here though, what a fight it was."
Diaz conceded afterwards that he spent too long looking for that one killer blow which never came to be able to expect a points decision.
"I gave up too many early rounds,” he admitted. “He has a lot of heart but he was hurt. Anyone else would take a knee but he did not and I lost too many rounds trying to wear him down and break his spirit.”
Amir’s younger brother Haroon got the night started for the Khan family in a similar tone, winning his professional debut over Brett Fidoe in super-flyweight action.
‘Harry’ Khan no doubt began anxiously, but soon shook off his stage fright to finish the four-round contest more confidently and took the maiden win via the referee’s scorecard.
Another debutant got off to winning ways in the form of London 2012 Olympian and Golden Boy new recruit Anthony Ogogo.
Ogogo looked impressive in a second-round stoppage of Kieron Gray, landing smooth shots throughout the first despite some admirable resistance from Gray.
A thumping right in round two brought the contest to a close and got the Lowestoft middleweight off to a dream start in the professional ranks.
Once again, however, fellow former Olympian Audley Harrison failed to make his fight last longer than his ring entrance.
Harrison attempted to bounce back from a crushing first-round defeat to David Price and move into world title contention after winning a second Prizefighter title in February.
Instead, he was defeated by unbeaten American Deontay Wilder in just 55 seconds – even shorter than the Price loss.
The 41-year-old Londoner was dropped by the first meaningful shot of the opening round, and though Wilder was allowed to continue the abuse when the count should have started, the referee rightly waved off the contest to deny Harrison any more misery.
The charismatic ‘Bronze Bomber’ made it 28 knockouts from 28 pro bouts and moves closer to a world title opportunity of his own.
The dejected ‘A-Force’, meanwhile, may well finally hang up the gloves after another emphatic and embarrassing setback.