Dy doped SmCo magnets with the nominal composition of Sm1−xDyx (Co, Fe, Cu, Zr)z were prepared by powder metallurgy method. The influence of Dy content on the remanence temperature coefficient and microstructure of magnets was investigated. XRD and TEM analysis showed that the magnets with different Dy content consisted of 2:17R cell phase and 1:5H cell boundary. Magnetic performance characterization showed that the remanence of the magnets decreased but the remanence temperature coefficient reduced as well with the increase of Dy content. When x was increased to 0.5, a comprehensive magnetic performance was obtained of which the remanence temperature coefficient (α) was 0.015%/°C in the temperature range of 20–300 °C and the maximum energy product descended tardily from 10.8 MGOe to 9.3 MGOe as the temperature rose from 20 °C to 300 °C. The two sub-lattice molecular field theory was used to calculate the temperature dependence of magnets remanence and to explain the temperature compensation effect of Dy content, the calculated results was in well correspondence with experimental results. Such method could also be used for the exploration of new thermal stability of magnets.