The influence of the microstructure on the hard magnetic properties of rare earth-iron based magnetic materials with outstanding coercivities and energy density products is surveyed. Nd2Fe14B based permanent magnets exhibit a complex multiphase microstructure. The grain size of the magnets strongly depends on the processing technique. If dopant and substituent elements are added to conventional magnets, the coercivity is mostly increased and the remanence slightly decreased. Substituent elements such as Dy or Co mainly change the magnetocrystalline anisotropy and Curie temperature of the hard magnetic Nd2Fe14B-phase. Our systematical TEM-study shows that the dopants, because of their different effect on the microstructure, can be divided into two groups independently of the processing technique, each with similar microstructural features. Secondary phases in the form of precipitates or new intergranular phases are formed after the dotation. Both types of dopants partly increase the coercivity or improve corrosion resistance. If a combination of type 1 and type 2 dopant elements to Nd-Fe-B or (Nd,Dy)-(Fe,Co)-B magnets is chosen, the coercivity and corrosion resistance is considerably improved. Magnets of the type Nd-Fe-B:(Ga,Nb), Nd-Fe-B:(Cu,Nb), Nd-(Fe,Co>-B:(Al,Mo) and (Nd,Dy)-(Fe,Co)-B:(Al,V) were systematically investigated and were found to behave according to the microstructural predictions. Secondary, soft magnetic phases, such as alpha-Fe, play an important role in the new, composite type hard magnetic materials. Our numerical, finite element comparison of the coercivity and remanence enhancement of nanocrystalline Nd2Fe14B and Sm2Fe17N27 isotropic magnets show that the dipolar and exchange interactions between the hard and soft magnetic grains control the exchange hardening. The remanence and the coercivity of exchange hardened, nanocrystalline, hard magnets sensitively depend on microstructural features, such as the grain size and the volume fraction of the soft magnetic phase.