A finite element model was built for MnBi/α-Fe nanocomposite permanent magnets, and the demagnetization curves of the magnets were simulated by micro-magnetic calculation. The microstructure of the cubic model is composed of 64 irregular grains with an average grain size of 20 nm. With the volume fraction of soft magnetic phase (t vol. %) ranged from 5 to 20 vol. %, both isotropic and anisotropic nanocomposite magnets show typical single-phase permanent magnets behavior in their demagnetization curves, illustrating good intergranular exchange coupling effect between soft and hard magnetic phases. With the increase of volume fraction of soft magnetic phase in both isotropic and anisotropic magnets, the coercive force of the magnets decreases monotonically, while the remanence rises at first to a peak value, then decreases. The optimal values of maximum energy products of isotropic and anisotropic magnets are 84 and 200 kJ/m3, respectively. Our simulation shows that the MnBi/α-Fe nanocomposite permanent magnets own excellent magnetic properties and therefore good potential for practical applications.