The phase transformation and the exchange coupling in (Ndo095Lao005)9.5FebaICOsNb 2BI05 have been investigated. Nanocomposites were obtained by treating amorphous precursors at temperatures ranging from 650TC to 9500C for 10 minutes. The magnetic properties were characterized via the vibrating sample magnetometer (VSM). X-ray diffraction (XRD), thermomagnetic analysis (TMA), and transmission electron microscopy (TEM) were used to perform phase identification, measure grain size, and analyze phase distribution. The strength of the exchange coupling between the magnetically hard and soft phases in the corresponding nanocomposite was analyzed via the AM-versus-H plot. It was found that the remanence (Br), coercivity (Hci), and maximum energy product (BHmax) obtained were affected by the magnetic phases present as well as the grain size of constituent phases and their distribution. The optimal magnetic performance, BHm, occurred between 700°C to 750°C, where the crystallization has completed without excessive grain growth. TMA and TEM indicated that the system was composed of three phases at this point, Nd2(Fe Co) 14B, ca-Fe, and Fe3B. The exchange coupling interaction among these phases was consistently described via the AM-versus-H plot up to 750°C. The Br, Hci, and BHmax degraded severely when the thermal treatment temperature increased from 750°C. This degradation may be attributed to the grain growth of the main phases, from 45 to 68nm, and the development of precipitates, which grew from 5nm at 750°C to 12nm at 850°C. Moreover, the amount of the precipitates was found to increase with the thermal treatment temperatures. The precipitates, presumably borides, may cause a decrease in the amount of the a-Fe and Fe 3B and result in a redistribution of the Co in the nanocomposites. The increase of the Co content in the Nd 2(Fe Co) 14B may explain the increase of its Curie temperature with the thermal treatment temperatures. In this paper, we examine the impacts of these factors on the magnetic properties of (Ndo 95Lao 05)9 5FebaICosNb2B10.5 nanocomposite.