The magnetic properties of Nd17Fe76.5B5Cu1.5‐type sintered magnets, produced using a combination of hydrogen decrepitation and milling, have been investigated. An isothermal anneal or a step anneal, both performed after homogenization, resulted in a marked improvement of magnetic properties of the sintered magnets. Thermomagnetic analysis (TMA) of the sintered magnets showed that, in addition to a matrix phase with a Tc = 314 ± 5 °C, there was another ferromagnetic phase with a Tc = 54 ± 5 °C. The microstructural investigations showed a considerable amount of free α‐iron in the cast material, whereas no free iron was observed in the microstructure of the sintered magnets. However in very isolated areas within the sintered magnets, a Nd‐Fe phase with Fe/Nd∼8 was identified (probably Nd2Fe17‐type phase). The observation of this phase was consistent with results of TMA and the possible role of this phase in coercivity behavior is discussed.