A method is disclosed enabling a technologically controllable and economical production of a hard-magnetic powder composed of a samarium-cobalt base alloy for highly coercive permanent magnets. The method is based on a HDDR treatment in which a starting powder is subjected to hydrogenation with disproportionation of the alloy in a first method step under hydrogen and, in a subsequent, second method step under vacuum conditions, a hydrogen desorption with recombination of the alloy. A starting powder containing samarium and cobalt is treated in the first method step either at a high temperature in the range of 500° C. to 900° C. and with a high hydrogen pressure of >0.5 MPa or by applying an intensive fine grinding at a low temperature in the range of 50° C. to 500° C. and with a hydrogen pressure of >0.15 MPa. By means of the method of the invention, magnetic alloy powders can be produced from samarium-cobalt base alloys; highly coercive permanent magnets can be produced from these magnetic alloy powders, particularly by hot compacting or plastic bonding.