Sintered NdDy-Fe-B magnets were made from strip cast flakes by powder metallurgy method. For the magnet with 6 wt.% Dy substituted Nd, a remarkable coercivity increase of 70% was obtained after aging at 900 °C for 2 h and a high coercivity of 23.5 kOe was achieved after aging at 520 °C for 2 h. The average diameter of the oxide particles decreased during the following 900 °C aging treatment. Dy and O diffusion from oxide particles to Nd-rich phase during the aging process was observed. The oxide evolution and Dy element diffusion were helpful to the coercivity enhancement.