Abstract This paper deals with an inverse problem on simultaneously determining a time-dependent potential term and a time source function from two-point measured data in a multi-term time-fractional diffusion equation. First we study the existence, uniqueness and some regularities of the solution for the direct problem by using the fixed point theorem. Then a nice conditional stability estimate of inversion coefficients problem is obtained based on the regularity of the solution to the direct problem and a fine property of the Caputo fractional derivative. In addition, the ill-posedness of the inverse problem is illustrated and we transfer the inverse problem into a variational problem. Moreover, the existence and convergence of the minimizer for the variational problem are given. Finally, we use a modified Levenberg–Marquardt method to reconstruct numerically the approximate functions of two unknown time-dependent coefficients effectively. Numerical experiments for three examples in one- and two-dimensional cases are provided to show the validity and robustness of the proposed method.