The preparation of neodymium-iron alloys has been studied by fused salt electrolysis from a chloride bath using a consumable iron cathode. The effect of various process parameters such as concentration of neodymium chloride in the bath, temperature of electrolysis and cathode current density on current efficiency have been investigated. A maximum current efficiency of 38% and metal yield of 51% was obtained from a bath containing 25% NdCl3 in KCl at 875 degrees C.