LiGaTe2 is a promising nonlinear optical crystal with a large figure of merit (d362/n3), but it is difficult to grow the LiGaTe2 single crystal due to its extreme instability. In this work, we used Ag to replace Li and successfully grew a Li0.5Ag0.5GaTe2 crystal by the modified Bridgman method for the first time. We found it has thermal stability below 200 °C in an atmospheric environment, and the thermal expansion coefficient is positive. This is different from LiGaTe2 and AgGaTe2 which have a negative thermal expansion coefficient along the c-axis. When the temperature exceeds 200 °C, Li0.5Ag0.5GaTe2 is easily decomposed and oxidized. Under closed vacuum conditions, the melting and solidifying points of Li0.5Ag0.5GaTe2 are measured to be 719 and 694 °C. XPS spectra show that the binding energies of Li, Ga, and Te are higher than LiGaTe2, and the surface is easily oxidized. The A1 vibration modes are found at 117.72 and 135.44 cm-1 by the Raman spectrum which is related to the Te and Ga-Te bond in [GaTe4]5- tetrahedra. Li0.5Ag0.5GaTe2 has a wide transmittance range from 0.94 to 20 μm, and there was two-photon absorption near 16 μm. The phonon spectrum and PDOS were simulated by the DFT calculation to study the phonon vibration modes in the lattice, which shows that the density of the Raman vibration is higher than those of AgGaTe2 and LiGaTe2. The SHG test results showed that the SHG response intensity of Li0.5Ag0.5GaTe2 is 1.5 times that of AgGaS2, which shows its excellent nonlinear optical properties for mid-IR applications.