We observe the distances between estimated function outputs on data points to create an anisotropic graph Laplacian which, through an iterative process, can itself be regularized. Our algorithm is instantiated as a discrete regularizer on a graph's diffusivity operator. This idea is grounded in the theory that regularizing the diffusivity operator corresponds to regularizing themetric on Riemannianmanifolds, which further corresponds to regularizing the anisotropic Laplace-Beltrami operator. We show that our discrete regularization framework is consistent in the sense that it converges to (continuous) regularization on underlying data generating manifolds. In semi-supervised learning experiments, across ten standard datasets, our diffusion of Laplacian approach has the lowest average error rate of eight different established and state-of-the-art approaches, which shows the promise of our approach.