In the current research, the microstructural and magnetic characteristics of Nd2(Fe1-xCox)14B nanoparticles produced through the diffusion reduction process have been investigated. For this purpose, Nd(Fe1-xCox)B oxide powders for x=0.05, x=0.3 and x=0.5 were heat treated , once in hydrogen atmosphere (H2) and once again by diffusion reduction process using calcium hydride (CaH2). The crystal structure and chemical composition of the resulting Nd-Fe-Co-B powders were identified by X-ray diffraction and X-ray energy dispersive spectroscopy. The overall morphology and magnetic properties of the synthesized powders were measured by field emission scanning electron microscope, transmission electron microscope and vibrating sample magnetometer. The results demonstrated that oxide powders reduced with hydrogen gas had a soft magnetic character due to the formation of the bcc-FeCo magnetic phase. However, oxide powders reduced via diffusion reduction revealed hard magnetic characteristics due to the direct diffusion of NdH2, Fe, Co, and B phases and the production of the Nd2(Fe,Co)14B hard magnetic phase. The Nd2(Fe,Co)14B particles were rinsed with water and dilute acetic acid to eliminate the byproducts (CaO) formed during the diffusion reduction process. After washing, coercivity dropped due to the creation of the Nd2Fe14BHx soft magnetic phase, whereas saturation magnetization rose due to the elimination of the non-magnetic CaO phase from the composition of Nd2(Fe,Co)14B nanoparticles.