The effect of post-sinter tempering on the DyF 3 -diffusion processed Nd–Fe–B was investigated using two kinds of starting magnets. The increase of coercivity after diffusion process using as-sintered magnet was higher than that using two-stage tempered magnet. The grain boundary phase of the tempered magnet became discontinuous upon further annealing at the temperature of diffusion process. This clearly indicates that a continuous grain boundary phase is helpful to the DyF 3 -diffusion process. When sufficiently diffused, there is no enrichment of Dy in the grain boundary phase. The excess Nd as a result of Dy substitution in the Nd 2 Fe 14 B matrix phase forms Nd–O phase at grain boundary and on the surface of the magnet. The increase of coercivity can be related to the (Nd,Dy) 2 Fe 14 B grains as well as to the improved decoupling by the grain boundary phase.