Diffuse reflection is the reflection of light or other waves or particles from a surface such that a ray incident on the surface is scattered at many angles rather than at just one angle as in the case of specular reflection. An ideal diffuse reflecting surface is said to exhibit Lambertian reflection, meaning that there is equal luminance when viewed from all directions lying in the half-space adjacent to the surface.
A surface built from a non-absorbing powder such as plaster, or from fibers such as paper, or from a polycrystalline material such as white marble, reflects light diffusely with great efficiency. Many common materials exhibit a mixture of specular and diffuse reflection.
The visibility of objects, excluding light-emitting ones, is primarily caused by diffuse reflection of light: it is diffusely-scattered light that forms the image of the object in the observer's eye.
Diffuse reflection from solids is generally not due to surface roughness. A flat surface is indeed required to give specular reflection, but it does not prevent diffuse reflection. A piece of highly polished white marble remains white; no amount of polishing will turn it into a mirror. Polishing produces some specular reflection, but the remaining light continues to be diffusely reflected.
The most general mechanism by which a surface gives diffuse reflection does not involve exactly the surface: most of the light is contributed by scattering centers beneath the surface, as illustrated in Figure 1. If one were to imagine that the figure represents snow, and that the polygons are its (transparent) ice crystallites, an impinging ray is partially reflected (a few percent) by the first particle, enters in it, is again reflected by the interface with the second particle, enters in it, impinges on the third, and so on, generating a series of "primary" scattered rays in random directions, which, in turn, through the same mechanism, generate a large number of "secondary" scattered rays, which generate "tertiary" rays, and so forth. All these rays walk through the snow crystallytes, which do not absorb light, until they arrive at the surface and exit in random directions. The result is that the light that was sent out is returned in all directions, so that snow is white despite being made of transparent material (ice crystals).