Abstract: High coercivity, high remanence, and high energy product (NdDy)₂(FeNb)₁₄B/α-Fe nanocrystalline alloys are prepared by melt spining and subsequent annealing. The best properties of remanence (B_r), coercivity (H_ci) and maximum energy product ((BH)_max) are 1.02 T, 702 kA/m and 134 kJ/m³, respectively. The microstructure of the two phase nanocomposite consists of hard magnetic (NdDy)₂(FeNb)₁₄B and soft magnetic α-Fe with an average size of 30 nm. These small dimensions allow effective exchange coupling between hard and soft magnetic grains and result in the simultaneous enhancement of B_r,H_ci and (BH)_max.