We have performed a comprehensive theoretical analysis of Tm‐based chalcogenides MgTm2Y4 (Y=S, Se) to understand magnetic, optical, mechanical, and transport characteristics. We have employed PBEsol‐GGA functional and modified Becke‐Johnson (mBJ) potential while computing the mechanical and spin‐polarized electronic properties, respectively. The structural stability of both spinels is confirmed using formation energy and Born stability criteria. Both spinels are found exhibiting ductile nature according to the computed Pugh and Poisson’s ratios. For observing the room temperature ferromagnetism, Curie temperature has been calculated. Furthermore, spin‐polarized electronic properties reveal that both spinels exhibit ferromagnetic nature, which is induced due to coupling among Tm and S/Se related constituent states. The potential optoelectronic applications are suggested by computing and discussing dielectric constant, refractive index and absorption coefficient. BoltzTraP code is used to investigate the thermoelectric features of MgTm2Y4 (Y=S, Se) in the 200K‐800K temperature range.This article is protected by copyright. All rights reserved.