The microstructural evolution of Nd-rich grain boundary phases (GBP) in connection with triple junction phases (TJP) during post-sintering annealing (PSA) was investigated. The Cu-rich TJP in the as-sintered sample was mostly a fcc-NdO phase but the GBP were a mixture of h-Nd2O3 and Nd phases. The fcc-NdO of the TJP in the as-sintered state gradually transformed to h-Nd2O3 during the first and the second PSA steps. However, it transformed to a C-Nd2O3 phase as both a massive form such as TJP and a thin GBP after the modified second PSA step. This suggests that the mechanism for the formation of metastable C-Nd2O3 may not be solely the interface energy. In contrast, the mixture of h-Nd2O3 and Nd of the GBP in the as-sintered state gradually transformed to C-Nd2O3 which is embedded in the amorphous matrix as the PSA goes from the first to second or modified second PSA step. The formation of the C-Nd2O3 GBP with an amorphous phase is the main factor for increasing the coercivity (from 21.8 to 30.4 kOe) after the second or modified second PSA step.