The　evolution　of　the　phase　constitution　and　the　microstructure,　as　well　as　their　effects　on　magnetic　performance,　were　investigated　systematically　using　a　prepared　nanocrystalline　single-phase　SmCo7　alloy　as　the　starting　material　for　a　series　of　annealing　processes.　The　SmCo7　(1:7　H)　phase　was　discovered　to　have　a　good　single-phase　stability　from　room　temperature　up　to　600　degrees　C.　The　destabilization　of　the　SmCo7　phase　results　in　the　formation　of　the　Sm2Co17　(2:17　R)　and　SmCo5　(1:5　H)　phases,　which　exist　as　phase-transformation　twins　and　particulate　precipitates,　respectively,　with　a　completely　coherent　relationship　with　the　1:7　H　parent　phase.　For　the　first　time　the　formation　mechanism　of　the　2:17　R　phase-transformation　twins　has　been　proposed,　in　which　the　ordered　substitution　of　1/3　of　the　Sm　atoms　by　Co-Co　dumbbell　pairs　along　two　particular　crystal　directions　was　demonstrated.　The　characteristic　width　values　of　the　2:17　R　phase-transformation　twins,　as　deduced　from　this　model　of　the　mechanism,　were　unambiguously　verified　by　the　experimental　results.　Among　the　SmCo7　alloys　with　various　phase　constitutions　and　microstructures,　the　best　magnetic　properties　were　obtained　in　the　nanocrystalline　1:7　H　single-phase　alloys.　The　present　work　may　promote　a　new　understanding　of　nanoscale-stabilized　single-phase　SmCo7　and　its　potential　applications　as　unique　high-temperature　permanent　magnets.　(C)　2010　Acta　Materialia　Inc.　Published　by　Elsevier　Ltd.　All　rights　reserved.