With the use of neutron powder diffraction, we have discovered and characterized an extremely anisotropic thermal expansion, including negative thermal expansion (NTE), in an itinerant-electron system Hf0.86Ta0.14Fe2. It is revealed that the intermetallic compound Hf0.86Ta0.14Fe2 exhibits temperature-induced magnetic phase transitions from ferromagnetic (FM) to antiferromagnetic (AFM) order and then to the paramagnetic (PM) state upon heating. The FM-AFM transformation proceeds in a stepwise fashion, as a first-order phase transition, and is accompanied by an isomorphic (without change of symmetry) lattice collapse. The unit cell shrinks abruptly in the basal plane only, while it's dimension along the six-fold symmetry axis c changes continuously. The thermal evolution of the a lattice constant is found to drive the change from FM to AFM magnetic order. Hf0.86Ta0.14Fe2 shows a 0.41 % spontaneous volume reduction across the FM-AFM first-order magnetic transition, where a giant NTE, with a crystallographic volume thermal expansion coefficient -164×10 -6 K -1 , is observed. We further show that the AFM state can be transformed into a FM state by fewtesla magnetic fields, which results in a large positive magnetostriction. A remarkably large adiabatic temperature change of Tad = 2.2 K is obtained for a magnetic field change of 3 T around the FM-AFM transition temperature. Using angle dispersive synchrotron x-ray diffraction, the evolution of the lattice was investigated at room temperature under high pressures up to 25 GPa. The application of external pressure leads to the monotonous decrease of the unit-cell parameters. The contraction of the hexagonal lattice is anisotropic with a larger compression along the high-symmetry direction c. A bulk modulus of K0 = 223 GPa has been determined from the pressure-volume relationship.