<p><b>Abstract</b>—The possibility to spheroidize a powder prepared by crushing and subsequent milling of a scrap of out-of-life sintered NdFeB magnets is studied. The spheroidizing is performed using a setup intended for the plasma spheroidizing of powder materials, which was developed and designed in the Baikov Institute of Metallurgy and Materials Science, Russian Academy of Sciences. The NdFeB powder with particle sizes of 20 to 63 μm is spheroidized in a pure argon atmosphere or an argon–hydrogen gas mixture. When setting spheroidizing conditions, the plasma generator power is varied at different enthalpies of plasma jet. The structure and composition of prepared powders are studied by optical and electron microscopy and gas and X-ray fluorescent analyses. After spheroidizing, all particles of the powder material are found to be rounded in shape. In this case, substantial changing the chemical composition is noted. The alloy is enriched in iron and depleted of neodymium, praseodymium, and boron because of the transition of these elements from the metallic melt into an oxide slag. The main cause for the slag formation is the oxidized state of the initial powder material, which leads to the formation of oxide slag during plasma melting of powder particles. The decrease in the concentrations of oxygen and impurity oxygen-containing phases in the initial Nd–Fe–B powder used for spheroidizing is the necessary and individual research task, the solution of which will determine the preparation of spheroidized powders of required compositions.</p>