The present invention relates to a method of producing Nd—Fe—B based nanophase powder, or more particularly, to a method of producing Nd2Fe14B phase powder of 1 &mgr;m or less, having Nd2Fe14B crystal grains of 50 nm or less, which comprises the following steps of: producing a precursor powder having a mixture of elements of Nd, Fe and B by means of spray-drying a mixed aqueous solution comprising Nd metal salt, Fe metal salt, and boric acid; producing an oxide composite powder by means of desaltation of said powder; reducing the composite oxide powder, and ball-milling of said composite powder comprising Nd oxides and &agr;-Fe; producing a mixed powder of Nd2Fe14B/CaO phase by mixing Ca to said composite powder after milling; and removing CaO by washing said composite powder with water, followed by drying.