The microstructure of Sm(CobalFexCu0.08Zr0.03)8.2, where x=0.23, 0.26, and 0.28, in the as-cast state and after various processing stages has been examined by optical microscopy. The size of the 2:17 matrix phase was found to be approximately 100 μm in the as-cast state. A slight increase in the size of the 2:17 matrix was observed after thermal processing. Subgrains of 10 to 20 μm are present in the 2:17 matrix of the fully processed ingots. Powders with a mean particle size range of 3–300 μm were found to exhibit a Gaussian distribution. A slight increase in intrinsic coercivity (Hci) was observed when the mean particle size was decreased from 300 to 200 μm and remained nearly constant for sizes ranging between 10 and 200 μm. A significant decrease in Hci was observed when powders were further reduced below 10 μm. Similar trends were also observed for remanence (Br), maximum energy product (BHmax), and squareness of the second quadrant demagnetization curve. The size of the subgrains was found to be critical to these properties. The Hci of alloy powders with a high Fe content appeared to degrade more severely when reduced below 10 μm. For a fixed mean particle size, alloy powders with a high Fe content also exhibited a less-square second quadrant demagnetization curve. A Br of 9.2 kG, Hci of 18 kOe, Hcb of 7.4 kOe, BHmax of 19 MGOe, and a squareness ratio of 0.91 have been obtained on Sm(CobalFe0.23Cu0.08Zr0.03)8.2. As expected for alloys with a higher Fe content, Br of 11.3 kG, Hci of 20 kOe, Hcb of 8.1 kOe, BHmax of 25 MGOe, and a square ratio of 0.83 have been obtained on Sm(CobalFe0.28Cu0.08Zr0.03)8.2.- © 1997 American Institute of Physics.