The phase transformations and the evolution of the microstructure of a Nd16Fe76B8 alloy during the disproportionation stage of the hydrogenation disproportionation desorption recombination (HDDR) process have been studied in detail by means of scanning electron microscopy (SEM) and high resolution SEM (HRSEM). In-situ electrical resistivity measurements allow a sensitive monitoring and control of the advancement of the HDDR reaction. Using this method the samples were quenched under vacuum from different stages (10 min, 20 min and 120 min) of the disproportionation process at T=800-degrees-C and p(H-2)=0.7 bar. Backscattered electron images reveal that the Nd-rich grain boundary phase acts as a diffusion path for the hydrogen. The subsequent disproportionation of the Nd2Fe14B matrix from the grain boundary phase inwards results in the development of a submicrostructure consisting of a coarse Fe-network and in-between a fine lamellar structure of Fe-rich and Nd-rich layers with an estimated thickness of 20 nm. Spherical Nd-precipitates are distributed within the disproportionated area.