Several permanent magnet alloys based on the ternary Nd2Fe14B (2-14-1) composition have been prepared by inert gas atomization (IGA). The microstructure and magnetic properties of these alloys have been studied as a function of particle size, both before and after heat treatment. Different particle sizes have characteristic properties due to the differences in cooling rate experienced during solidification from the melt. These properties are also strongly dependent on the alloy composition due to the cooling rate’s effect on the development of the phase structure; the use of rare earth rich compositions appears necessary to compensate for a generally inadequate cooling rate. After atomization, a brief heat treatment is necessary for the development of the optimal microstructure and magnetic properties, as seen from the hysteresis loop shape and improvements in key magnetic parameters (intrinsic coercivity Hci, remanence Br, and maximum energy product BHmax). By adjusting alloy compositions specifically for this process, magnetically isotropic powders with good magnetic properties can be obtained and opportunities for the achievement of better properties appear to be possible. © 1997 American Institute of Physics.