The oil-based Nd-Fe-B sludge waste was directly recycled to single-phase Nd2Fe14B powders via the combination of purification and modified Ca-reduction reaction method. The impurities and organics in the purified Nd-Fe-B sludge waste were greatly reduced, reducing calcium consumption in the subsequent reduction and diffusion (RD) process, thereby reducing the cost. By further optimizing the Ca-reduction diffusion parameters, especially the mass ratio of CaCl2 and KCl, where the liquid CaCl2, along with the gaseous KCl provide conditions for sufficient and uniform Ca-reduction reaction, high-property Nd-Fe-B magnetic powders with good dispersion, uniform particle sizes, and excellent orientation, were successfully obtained. Using the mixed diffusion medium of CaCl2 and KCl with a mass ratio of 1:1, the room-temperature magnetization of the recycled Nd-Fe-B powders was increased to 157 emu/g at 3 T-magnetic field, which was about 28 % higher than that of the original sludge. The contents of carbon, hydrogen, and oxygen in the recycled magnetic powders were significantly reduced from 6.8, 1.8, and 5.9 wt% to 0.1, 0.19, and 0.56 wt%, respectively. In addition, the uniform grain size with X50 = 3.6 μm and good distribution greatly improved the orientation, which can be beneficial to the preparation of the bonded or sintered Nd-Fe-B-based magnets. The reasons that CaCl2-KCl mixed diffusion medium can lead to well-dispersed, uniform recycled powder with high magnetization arise from a combination of factors for improving the liquid phase reaction environment and the gaseous KCl to prevent agglomeration and inhibit particles merging or growth.