Nanocomposite permanent magnets have been extensively researched because of their unusually high remanence, high energy products and low cost, but little research has elucidated the underlying mechanism for microstructure improvement. Nanocomposite Nd9.5Fe79-xCo5NbxB6.5(x=0, 1, 2, 3) alloys were prepared by melt-spinning at a rate of 18m/s cooperating with subsequent annealing. The effects of Nb content on microstructure and magnetic properties for the alloys have been studied by XRD, VSM, TEM and 3DAP. The results shown that the Jr firstly increases with increasing Nb content from 0.92T up to 0.94T at x=1, then decreases obviously with further Nb addition. The iHc increases monotonically and then remains relatively lower increasing ratio. The (BH)max appears to increase from 104kJ/m3 at x=0 to a maximum of 120kJ/m3 at x=2, then decreases sharply. An intergranular NbFeB phase with a chemical composition near the Nb: Fe: B stoichiometry of 26: 48: 26 between the Nd2Fe14B interfaces was found for Nd9.5Fe77Co5Nb2B6.5 by 3DAP technique, which provides direct evidence of magnetic properties improvement.