In the five-component permanent magnets based on Sm 2 Co 17 the formation of the familiar microstructural features (2 : 17 cell, 1 : 5 cell wall, and 1 : 3 lamellae) are elucidated with the help of recent and past information on the phase equilibria and crystal structures. Contrary to Zr-free alloys, in which the 1 : 5 cell-wall phase can form directly, the quinary alloys, to attain peak magnetic coercivity, undergo a transformation within the cell walls from undesirable 2 : 7 + 5 : 19 to high-anisotropy 1 : 5. A dramatic increase in the Cu content of the cell wall accompanies this transformation.