The effect of annealing process on the microstructure and magnetic properties of sintered NdFeB magnets were studied. The results show that the microstructure of magnets is ameliorated after annealing. The grain boundary became smoother and clearer, the Nd-rich phase distributed surrounding the grain dispersedly and equably, and the boundary phase became stable and well-proportioned. Therefore, the coercive force was remarkably enhanced, the residual magnetism and (BH) max were increased at the same time, and thermal stability of the magnet was improved enormously.