We have systemically investigated the correlations among magnetic characterization and lattice distortion as well as multiphase couplings during the fabrication process of the high performance Nd‐Fe‐B magnets. Rietveld structural refinement is employed to determine the atomic occupations in every phase in Nd‐Fe‐B magnet. The magnetism of Nd‐Fe‐B was studied with a modified magnetic valence model. It reveals that the magnetic moment only depends on the total number of d and s‐p as well as f electrons, not on the band shape. The coercivity of Nd‐Fe‐B magnet is related to the Nd‐Fe coupling, and its hard magnetic characteristics is derived from the Nd‐B layers. The extra Nd atoms are necessary to be arranged near to the Fe‐Fe layers or Fe atomic clusters for forming Nd‐Fe pairs, which enhances the coercivity. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)