Self-aligned via and plug patterning using diagonal hardmasks for improved overlay in fabricating back end of line (BEOL) interconnects is described. In an example, a method of fabricating an interconnect structure for an integrated circuit involves forming a first hardmask layer above an interlayer dielectric layer disposed above a substrate. The first hardmask layer includes a plurality of first hardmask lines having a first grating in a first direction and comprising one or more sacrificial materials interleaved with the first grating. The method also involves forming a second hardmask layer above the first hardmask layer. The second hardmask layer includes a plurality of second hardmask lines having a second grating in a second direction, diagonal to the first direction. The method also involves, using the second hardmask layer as a mask, etching the first hardmask layer to form a patterned first hardmask layer. The etching involves removing a portion of the one or more sacrificial materials.