Diefenbach was a pioneer of nudism and the peace movement. His country commune, Himmelhof, in Ober Sankt Veit near Vienna (1897–1899) was one of the models for the reform settlement Monte Verità in Ascona. His ideas included life in harmony with nature and rejection of monogamy, turning away from any religion (although he was a follower of theosophy), and a vegetarian diet. When his commune went bankrupt, he moved to Capri and stayed there for the rest of his life.
As a painter, Diefenbach was an independent representative of Symbolism. There has been a museum of his works in Certosa di San Giacomo on Capri since 1974.
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