We prove that the domination number of every graph of diameter 2 on vertices is at most as (with logarithm of base ). This result is applied to prove that if a graph of order has diameter 2, then it contains a spanning caterpillar whose diameter does not exceed . These estimates are tight apart from a multiplicative constant, since there exist graphs of order and diameter 2, with domination number not smaller than . In contrast, in graphs of diameter 3, the domination number can be as large as (but not larger).
Our results concerning diameter 2 improve the previous upper bound of , published by Faudree et al. in [Discuss. Math. Graph Theory 15 (1995), 111-118].