Decalcification studies on samarium–cobalt intermetallic alloy powder produced by reduction–diffusion process have been carried out under wide range of experimental conditions based on Taguchi method. This approach has been adopted to arrive at optimum conditions for the leaching operation for calcium removal without affecting the yield of Sm₂Co₁₇. The percentage effect of number of water wash, acid wash, pH and digestion time on decalcification was investigated. Conditions predicted by Taguchi method successfully brought down the residual calcium value to about 1750 ppm in Sm₂Co₁₇ suitable for further operation related to making permanent magnet. The Sm₂Co₁₇ phase was found to be stable even after long period of leaching operations as characterized by scanning electron microscopy and X-ray diffraction. Leaching of calcium from large batch product samples have been demonstrated successfully with 99.5% yield and residual calcium in the range of 1740–1750 ppm. Acetic acid and propionic acid showed comparable results in decalcification.