Insertion devices are crucial parts of the third generation of synchrotron radiation facility and free electron laser devices. The use of insertion device can improve the brightness and coherence of synchrotron radiation light. Undulator, one kind of insertion device, is largely installed in the storage ring of Shanghai synchrotron radiation facility. The main part of undulator is the device of magnetic source which consists of periodically arranged permanent magnets with the same magnetic field strength. In order to keep the normal electronic trajectory, a stable magnetic intensity in undulator is required. The Sm2Co17 type permanent magnets with high intrinsic coercive force and good radiation stability are largely installed in the facility. However, the losses for magnetic properties of Sm2Co17 type permanent magnets can be induced by longperiod irradiation in undulator through beam loss or mis-steering. The reduction of magnetic field could affect the electron energy, direction and the movement trajectory and so on, which seriously affects the amount of synchrotron radiation light. Microstructure of Sm2Co17 type permanent magnet affects the macro magnetic properties and there is not any available report on the microstructure investigation of Sm2Co17 type permanent magnet after being irradiated. Therefore, in this work, the effect of irradiation on the microstructure evolution is investigated. The radiation fields of Sm2Co17 type permanent magnets and the main particles (neutron) that result in losing magnetic properties are first analyzed and confirmed by Monte Carlo code FLUKA calculation. Then, Sm2Co17 type permanent magnet samples are irradiated by Ar ions at different fluences to simulate neutron irradiation damage. Meanwhile, the microstructure evolutions of irradiated samples are characterized by transmission electron microscopy. Moreover, high resolution transmission electron microscopic images are taken at the peak of radiation damage field to further investigate the radiation damage. In the respect of macro magnetic properties, hysteresis loops are measured by vibrating sample magnetometer in order to study the change of saturated magnetization. The results indicate that the decrease of saturated magnetization value is related to the change of microstructure, which proves the speculation of previous investigations. The evolution of 2:17 phase transformed from single crystals into amorphous structure is a possible microscopic mechanism for irreversible loss for saturated magnetization of Sm2Co17.