A novel method to prepare anisotropic composite magnetic material was described. A block of Nd2Fe17 compound was heated with the surrounding B (or B2O3) powder and the reaction accelerator Ca. In the reaction region, rod-shaped Fe precipitates were formed inside Nd2Fe14B matrix grains. The longitudinal directions of those are parallel to the B diffusion path, while perpendicular to the c-axis of Nd2Fe14B crystals. The Fe diameter depends on the heating temperature, below 100nm at 1123K. This structure is regarded as eutectic, and differ from that formed by peritectic solidification. The similar reaction product was formed in the powder form by using Nd2Fe17 powder instead of the bulk material. That product has larger magnetization than Nd2Fe14B, but has no coercivity and the small anisotropy field about 1.6MA/m.