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A review is given of the formation, the crystal structure and the magnetic properties of several classes of rare earth based intermetallic compounds that lend themselves as starting materials of permanent magnets. These compounds include R,Fe,.,B, R,Fe& and R,Co,,B and the large class of ternary rare earth compounds having the tetragonal ThMn,, structure. Special emphasis is given to the changes in magnetic properties of R,Fe,, compounds observed after interstitial solution of C or N atoms. The magnetic properties of all these compounds are discussed in terms of current models based on intersublattice and intrasublattice exchange and the interplay between the rare earth sublattice anisotropy and 3d sublattice anisotropy.Asubstantial portion ofthe review is devoted to manufacturing routes of permanent magnets and a description of the coercivity mechanisms operative in the magnets. A comparison is made of the performance and economic costs of various types of magnets and novel applications are briefly discussed.