We studied the effect of surface modification and particle size on the oxidation and corrosion behavior of neodymium-iron-boron (Nd-Fe-B) magnetic alloy powders by using thermal analysis to accelerate efforts to develop useful poly(phenylene sulfide) bonded Nd-Fe-B magnets. The results indicate that coating the Nd-Fe-B powders with a coupling agent provides the required oxidation and corrosion resistance for the targeted processing conditions. The coated rare earth powders are thermally and environmentally stable at elevated temperatures and in a 100% humid environment, where commercial rare earth alloy magnets are not usable. The coating treatment more significantly affects the small particle powders. A mechanism accounting for the improved thermal and environmental stability is presented and discussed. Magnetic measurements were performed to verify the thermal analysis results.