Abstract: The effects of Dy and Nb substitution on the formation, microstructrure and magnetic properties of Pr₂Fe₁₄B/α-Fe nanocomposites have been investigated. It was found that for Pr₉Fe₈₅B₆ ribbons, the metastable Pr₂Fe₂₃B₃ phase occurs after the initial crys. tallization of a-Fe and prior to the formation of the finial mixture of Pr₂Fe₁₄B and α-Fe. However, no metastable phase was observed during the crystallization of Dy or both Dy and Nb substituted ribbons. The addition of both Dy and Nb can cause the significant improvement of the magnetic properties.