The magnetic properties and microstructures of the HDDR powders fabricated from the NdFeB sintered magnets were investigated in order to improve their orientation. In case of fabricating from the strip cast alloys, the hydrogen-pulverized powders showed the dependence of the orientation on their powder sizes. On the other hand, the pulverized powders from the sintered magnets showed high orientation regardless of their powder sizes. This is due to inheritance of the high crystal orientations of the sintered magnets as starting materials. And the formation of the fine Nd₂Fe₁₄B crystals just at the surface area of the pulverized powders could be processed by the additional annealing under Ar atmosphere in advance of the HDDR treatment. As a result, the residual magnetization of the “capsule-structured” HDDR powders was improved from 100 to 125 emu/g due to remaining the unreacted Nd₂Fe₁₄B phases with high orientation at the inner core of the HDDR powders. This technique would provide the anisotropic NdFeB bonded magnets with high (BH)_max, and the new environment-friendly recycling process of the NdFeB magnets with low cost.