The effect of the grain boundary microstructure on the anisotropy and coercivity was investigated in an HDDR Nd-Fe-B permanent magnetic alloy. Considering the special microstructure of its magnetic powder grain, an anisotropic theoretical model influenced simultaneously by the structure defect at the grain boundary and the exchange coupling interaction was put forward. The variations of the structure defect factors based on the nucleation and pinning mechanism with 2r0/lex (where r0 and lex are the defect thickness and the length of exchange coupling, respec-tively) were calculated. The results show that the coercivity mechanism of an HDDR Nd-Fe-B permanent magnetic alloy is greatly related to its microstructure defect at the grain boundary. For a fixed lex, when 2r0/lex < 1.67, the coercivity is controlled by the pinning mechanism; when 2r0/lex > 1.67, it is determined by the nucleation mechanism. The coercivity reaches the maximum when 2r0/lex = 1.67. The calcula-tion result is consistent well with the experimental result given by Morimoto et al.