A complex study of the structure, phase composition, features of the surface topology, magnetostriction and thermal properties of the compound Tb0.8Sm0.2Fe2 was carried out. Peculiarities of the structure at the micro- and nanolevel were found; information on the magnetic domain structure at room temperature was obtained. X-ray structural studies in a wide temperature range from 90 to 760 K, including the Curie point, are presented. Experimental data on the thermal expansion and magnetostriction in magnetic fields up to 12 kOe were obtained and analyzed. Anomalies on the thermal expansion curve Δl/l(T) and on the magnetostriction dependence λ(T) in the low-temperature region were revealed. The magnetostriction effect in the studied compound was found to be almost constant in a wide temperature range of 100–300 K and in fields up to 3.5 kOe.