The magnetic properties of the hexagonal intermetallic compounds involving the rare-earth and3dtransition metals have been reported in the literature. These alloys look promising as fine-particle permanent magnets. A large number of samples in the system SmCo5-xCuxwere prepared by induction melting under a protective atmosphere, and annealed at various temperatures. An outstanding feature of these alloys is their high intrinsic coercive force. After annealing at low temperatures, they show coercive forces above 20 kOe and an energy product of about 8 × 106G.Oe. The most important factors determining the coercive force appear to be the chemical composition, the cooling rate, the alignment of the SmCO5-rich phase, and the annealing treatment. Examination by electron microscopy and electron probe techniques suggests a spinodal decomposition of a supersaturated solid solution into two phases, one rich in SmCo5and the other rich in SmCu5.