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The synthesis of Nd‐Fe‐Co‐B by the reduction‐diffusion process from neodymium trichloride and its magnetic properties and microstructure have been investigated by x‐ray diffraction, scanning electron microscope, and magnetic analysis. According to the thermodynamic data, calcium is capable of reducing neodymium trichloride and then a Nd‐Fe‐Co‐B alloy is formed by thermal diffusion in the presence of iron, cobalt, and ferro‐boron powders at high temperature. The reduction reaction starts at 720 °C. Thermal diffusion commenced at 800 °C and forming some Nd2Fe14B phase, but the matrix Nd2Fe14B formed primarily at 860–950 °C. There are three types of phases with different compositions in the sintered Nd‐Fe‐Co‐B R/D powders. The oxygen and calcium contents were 0.2 and 0.1 wt. %, respectively. The best yield of Nd‐Fe‐Co‐B powder was up to 98%. The magnetic properties of the sintered Nd‐Fe‐Co‐B depended on the temperature and time of the reduction‐diffusion process. The best magnetic properties obtained were Br...