The effect of partial substitution NdX3(X=F or Cl) for Nd2O3on the reduction–diffusion (R/D) process of Nd–Fe–B powders has been investigated. NdX3reacts with Ca in the R/D process to produce CaX2. CaCl2is distributed uniformly around the Nd2Fe14B grains after reaction. During water washing, CaCl2reacts quickly with water. This improves the disintegration of compacts and facilitates the removal of Ca. The best results with residual Ca content of 400 ppm and oxygen content of 3000 ppm were obtained. In the case of fluoride, however, a negative result was found. There was no improvement in the disintegration of fluoride compact. This was due to the poor water affinity of CaF2.