The intermetallic compound Nd2Fe14B undergoes four-step phase transformations in a hydrogen atmosphere, namely, hydrogenation, decomposition, desorption and recombination. This phenomenon was observed in a study of the sintering behavior of an Nd-Fe-B magnet in atmospheric hydrogen gas. The sinter produced consists of crystalline grains ranging from extremely large to very small, and are magnetically isotropic (iHc approximately 7 kOe). The decomposition products first form fine crystalline grains and then grow into extremely large grains by an abnormal grain growth process when hydrogen is naturally desorbed. The forced low-temperature hydrogen desorption from the decomposition product creates powders with fine crystal grains (of order 0.3 Â¿m), which have high coercivity (≫10 kOe). This process is called the HDDR process after the four steps involved. The addition of small amounts of elements such as Ga, Zr and Hf is effective for producing anisotropic magnet powders with good magnetic properties. It is now possible to prepare bonded magnets with (BH)max=18 MGOe (140 kJ/m3) from these anisotropic powders. This review describes the HDDR process and the uses of HDDR powders for anisotropic Nd-Fe-B bonded magnets and for full dense magnet production.