The possibility of inducing magnetization in tungsten selenide monolayer by alloying with vanadium selenide was investigated through first-principles calculations. Electronic, optical, and magnetic properties of different W1–xVxSe2 alloy compositions were studied extensively. As the proportion of vanadium atoms in the alloys increased, a phase transition from semiconducting to metallic to semiconducting was discovered. All alloy compositions demonstrated induced magnetism with a long-range ferromagnetic order. Interestingly, in the case of the W0.25V0.75Se2 alloy, spin-up states in the band diagram showed a finite band gap, while a nonzero band gap was found for spin-down states. The W0.25V0.75Se2 alloy can be used as a spin filter tunneling barrier exploiting this fascinating property. High spin polarization of the tunnel current was found for the alloy. Furthermore, under the Curie temperature, electrical conductivity for the spin-up channel was found to be zero, while conductivity for the spin-down channel was around 1019 (Ω cm s)−1 when the chemical potential was 0.2 eV greater than the Fermi energy. Changes in optical properties were also investigated through time-dependent density functional theory calculations. The findings of this study will be beneficial for proposing new magnetic monolayer alloys for application in nanoscale spintronic devices.