Starting from rapidly quenched NdδFe13.1B(2.05 ⩽ δ ⩽ 147.6) alloys and by appropriate annealing, the microstructure was tailored from strongly interacting Nd2Fe14B grains to magnetically isolated single domain Nd2Fe14B grains embedded in a nonmagnetic Nd-rich matrix (α-Nd and γ-Nd). This change in microstructure was found to have a large effect on coercivity, i.e., coercivity, μ0Hc, increases with an increase of the Nd concentration from 1.25 T in Nd2.05Fe13.1B to 2.75 T in Nd147.6Fe13.1B at 290 K. Using transmission electron microscopy, the Nd2Fe14B grains in Nd147.6Fe13.1B were confirmed to be randomly oriented platelets with the c axis normal to the plate and an average size of 100×40×25 nm. For these randomly oriented, noninteracting, single domain Nd2Fe14B grains, the coercivity was calculated using a Stoner–Wohlfarth model which included the shape anisotropy of the grains. The observed coercivity of Nd2Fe14B in such nanocomposite Nd147.6Fe13.1B alloys is ∼83% of its theoretical value. © 2000 American Institute of Physics.