In this paper, we demonstrate the existence and significance of diffractive orbits in an open microwave billiard, both experimentally and theoretically. Orbits that diffract off of a sharp edge of the system are found to have a strong influence on the transmission spectrum of the system, especially in the regime where there are no stable classical orbits. On resonance, the wavefunctions are influenced by both classical and diffractive orbits. Off resonance, the wavefunctions are determined by the constructive interference of multiple transient, nonperiodic orbits. Experimental, numerical, and semiclassical results are presented.