A functionally graded rare earth permanent magnet is in the form of a sintered magnet body having a composition R1aR2bTcAdFeOfMg wherein the concentration of R2/(R1+R2) contained in grain boundaries surrounding primary phase grains of (R1,R2)2T14A tetragonal system within the sintered magnet body is on the average higher than the concentration of R2/(R1+R2) contained in the primary phase grains, R2 is distributed such that its concentration increases on the average from the center toward the surface of the magnet body, the oxyfluoride of (R1,R2) is present at grain boundaries in a grain boundary region that extends from the magnet body surface to a depth of at least 20 μm, and the magnet body includes a surface layer having a higher coercive force than in the interior. The invention provides permanent magnets having improved heat resistance.