We successfully fabricated partial Y substituted NdY-Fe-B magnets with nominal compositions of (Nd1–xYx)13.80FebalAl0.24Cu0.1B6.04 (at%, x = 0, 0.1, 0.2, 0.3, 0.4) by powder metallurgy process and the magnetic properties as well as service performances of the magnets were also systematically investigated. The phase constituents of the magnets have no obvious variation within the whole range of Y content, while the main phase grains form in-situ core–shell structure where Y gathers in the core and Nd mainly distributes in the shell. Compared with pure Nd-Fe-B magnets, the magnetic performances of Y substituted magnets slightly decrease on account of the poor intrinsic magnetic properties of Y2Fe14B. Fortunately, the μ0Mr, μ0Hcj and (BH)max of the 20 at% Y magnet still remain at a high level of 1.325 kG, 1.173 kOe and 342.884 kJ/m3, which approaches the performances of commercial N45-grade magnet. The service performances of Y substituted magnets indicate that though the surface corrosion products and Vickers hardness of the NdY-Fe-B magnets increase to a certain extent compared to Nd-Fe-B, the magnets with Y substitution still display relatively good service performances. Therefore, on the basis of sacrificing little partial magnetic and service performances, Y substituted Nd can still prepare NdY-Fe-B medium-grade magnets. By this way, we achieve the balanced utilization of rare earth resources, which has significant meanings for the industry and scientific research.