The peculiarities of gemstone market functioning under the impact of globalization are examined. Modern condition of financial stabilization in world is defined and main features of gemstones are outlined. Negative impact of illegal market on socio-economic development of countries, namely on revenues to the country’s budget from the business, is revealed. The importance of the problem of transferring most of gemstones processing operations beyond the countries of production is emphasized. Poor public control over the circulation of precious stones is proven. The challenges are substantiated to be aggravating under the impact of globalization. The diamonds market, which has peculiar high demand, is analyzed: diamonds and derivatives account for 85% of global turnover. Application of managerial strategies for gemstones market to efficiently use resources is defined to be complicated by the fact that managerial strategies impact the high cost of product items and its variability; unique features; intangible qualities; complicated processing. More environmentally friendly production and social responsibility are confirmed to have impact on forming of demand on gemstones. Investment attractiveness of gemstones, except for diamonds, is proven to be low. Condition of production and consumption of diamonds is analyzed. Development condition of the market segment – non-diamonds gemstones – is shown. The activity of small enterprises and households engaged in gemstones production is confirmed to be characterized by chaotic and complicated nature of broker networks, leading to aggravated global challenges. The paper defines that expansion of spectrum and emergence of new opportunities for illegal activity, reduced income and loss of other types of economic benefits, growing negative ecological and social impact, growing exploitation of workers at illegal enterprises remain to be the global challenges of gemstones market functioning. The author suggests increasing of social and ecological responsibility of business, strengthening of the state regulating functions and promotion of gemstones market legalization in order to reduce the challenges.