Based on the microsatellite constellation, meteorological forecast has been greatly improved in terms of temporal and spatial resolution. To separate the frequency in RF front-end system of the microsatellite atmospheric microwave sounder, a waveguide diplexer with compact size and low insertion loss is adopted. A 166/183 GHz diplexer was designed by using equivalent circuit method and mode-matching technology. According to the actual situation of machining, the effects of iris steepness and iris thickness on the performance of the diplexer are analyzed in the simulation. Through the analysis of the split-block realization and the machining defects, the way of machining is continuously optimized to obtain a satisfactory machining sample. The maximum measured insertion loss is 1.5 dB, the minimum measured return loss is 15 dB, and the measured out-band rejection is higher than 27 dB. The simulation results are consistent with the measured results, which proves that the diplexer design method is feasible.