Improved electron microscope observation technique has confirmed some of the basic assumptions on the structure of Alnico V and has added knowledge of details. The permanent magnet precipitate was investigated at various states of its growth starting from nucleation. Pictures with details smaller than 20 A reveal the completely developed structure of Alnico V which differs somewhat from former descriptions. It can be recognized clearly that the precipitated particles have grown together to a continuous anisotropic network subdividing the matrix.Colloid patterns on these surfaces have been observed with electron microscope. During the reversal of magnetization, an anisotropic structure in the colloid‐covered areas of the pattern can be distinguished. The colloid particles align themselves, preferring one of the two faces of the precipitated structure. This is most pronounced in the steep part of the demagnetization curve. It can be observed as soon as the colloid starts to form patterns.The necessary surveying of magnet surfaces was possible by preparing very thin oxide replicas with a simple technique that eliminated the former ``floating'' method. Replicas were stripped from the surface which preserved the orientation without destroying the surface of the magnet.