The importance of newly developed permanent magnetic materials in many electromechanical,magnetomechanical and electronic applications is attributed to the drastic improvement inmicrostructure related properties, such as the remanence, the magnetic energy densityproduct and the coercive field. The influence of the microstructure on the magneticproperties of the magnets will be discussed, where special emphasis is laid on rare earthpermanent magnets. Highest performance, anisotropic Nd–Fe–B magnets withJr>1.5 T,(BH)max>450 kJ m−3 and JHc>750 kA m−1, which are produced by the powder metallurgy route, show a strong influence of compositionand processing parameters on the magnetic properties. The magnetic properties ofSm(Co,Cu,Fe,Zr)z sintered magnets, which are used nowadays for high temperature applications between 300 and500 °C,are determined by the cellular precipitation microstructure, which is developed during a complexheat treatment and by the microchemistry. Special hard magnetic powder materials, such asSm2Fe17N3 and nanocrystalline,composite Nd2Fe14B /(α-Fe,Fe3B) materials have been developed especially for usage in bonded magnetic materials, whichshow the strongest annual increase in the production of permanent magnets. Thephenomenon of the enhancement of remanence, occurring in single phase and compositeNd2Fe14B based magnets with isotropic grain alignment, is attributed to intergrain exchangeinteractions.