Information about the hydrodynamic, sediment transport and morphodynamics is limited in pocket beaches (Dehouck et al., 2009). However, a good understanding is necessary for effective management of coastal areas (Scholar et al., 1998). A small artificial pocket beach has relatively large shadow zones, therefore, diffraction might be an important process. Designs of pocket beaches are now based on equilibrium beaches and morphological changes and sediment losses during storm conditions. The numerical model XBeach is used to predict the beach development and losses. However, so far diffraction has not been included in these simulations. Therefore, the main objective of this research is to gain better insight on the effect of including short wave diffraction in the simulations on the morphological development in pocket beaches. Various modes of XBeach give the opportunity to variate including short wave diffraction or not. A simplified pocket beach and a case study beach has been used to research the influence of short wave diffraction on the morphological development within a storm and the underlying hydrodynamic and sediment transport processes. The simplified beach used, has a length of 500 metres and perpendicular groynes. The shadow zone covered about 30% of the embayment area. The case study beach is a stable designed, real, curved pocket beach in Constanta, Romania, with a similar surface area as the simplified beach but a total shadow area of 40%. In both cases the effect of short wave diffraction appeared to be a wider circulation cell than without diffraction and the outflow velocities along the groyne are lower with diffraction. Sediment transport patterns are similar to the circulation patterns, however, without diffraction an abrupt decrease of sediment transport can be found at the boundary of the shadow zone. Erosion and sedimentation patterns are dispersed gradually over the embayment in case diffraction is included in the simulations. In case diffraction is neglected the transitions of erosion and sedimentation are very abrupt. The exact results of the morphological development in the case study look more reliable than the simplified pocket beach results. Both cases, with and without diffraction, show erosion, however, with diffraction the total loss of sediment is 10% less relative to without diffraction. With diffraction, the exposed shoreline shows less erosion (10%), the shadow shoreline shows more erosion (90%), the shadow embayment shows less sedimentation (30%) and the exposed embayment shows more sedimentation (350%). Without diffraction abrupt vertical changes of about one metre exist at the boundary of shadow to exposed zones. The results with diffraction look promising however, a real validation of the results was not possible with the available data. In conclusion, diffraction appears to be an important phenomenon in relatively small pocket beaches. The sedimentation and erosion pattern is much more gradually dispersed over the area. The main alongshore velocities and sediment transport direction in the exposed zone and the gradual development of sediment transport into the shadow zones cause these gradual transitions. The abrupt transitions in the sediment transport patterns without diffraction result in very abrupt changes in the bed level alterations.