In this work, experimental characterizations and density functional theory (DFT) calculations were employed to investigate the influence of cations distribution on optical, magnetic, thermoelectric, and electrochemical properties of Li 0.5 Zr 0.5 Mg 0.5 Fe 1.5 O 4 spinel. The crystal structure was successfully refined in the Fd3̅ m space group. It was discovered that a migration between cations occupied the different spinel sites, induced by annealing temperature. The transmission electron microscopy images revealed the formation of the compound of about 34 and 134 nm after annealing at 500 and 900 K, respectively. The DFT calculation and visible−UV measurement proved that the semiconducting behavior of the studied compounds was associated with an increase in the band gap by increasing the annealing temperature. FC/ZFC measurements showed an increase in the Curie temperature from 561 to 598 K after increasing the annealing temperature. Again, we found the presence of a superparamagnetic behavior for the nanometric compound. The thermoelectric properties proved a high merit factor ZT, reaching 0.85. In addition, the efficiency of Li 0.5 Zr 0.5 Mg 0.5 Fe 1.5 O 4 as a cathode for lithium batteries was examined by investigating the discharge process of Li 0.5 Zr 0.5 Mg 0.5 Fe 1.5 O 4 at the early stages of lithiation.