Grain boundaries are thought to be the primary demagnetization sites of precipitate-hardening 2:17-type Sm-Co-Fe-Cu-Zr permanent magnets with a unique cellular nanostructure, leading to a poor squareness factor as well as a much lower than ideal energy product. In this work, we investigated the grain boundary microstructure evolution of a model magnet Sm25Co46.9Fe19.5Cu5.6Zr3.0 (wt. %) during the aging process. The transmission electron microscopy (TEM) investigations showed that the grain boundary region contains undecomposed 2:17H, partially ordered 2:17R, 1:5H nano-precipitates, and a Smn+1Co5n−1 (n = 2, 1:3R; n = 3, 2:7R; n = 4, 5:19R) phase mixture at the solution-treated state. After short-term aging, further decomposition of 2:17H occurs, characterized by the gradual ordering of 2:17R, the precipitation of the 1:5H phase, and the gradual growth of Smn+1Co5n−1 compounds. Due to the lack of a defect-aggregated cell boundary near the grain boundary, the 1:5H precipitates are constrained between the 2:17R and the Smn+1Co5n−1 nano-sheets. When further aging the magnet, the grain boundary 1:5H precipitates transform into Smn+1Co5n−1 compounds. As the Smn+1Co5n−1 compounds are magnetically softer than the 1:5H precipitates, the grain boundaries then act as the primary demagnetization sites. Our work adds important insights toward the understanding of the grain boundary effect of 2:17-type Sm-Co-Fe-Cu-Zr magnets.