Abstract Herein, a computational technique known as full potential linearized augmented plane wave (FP-LAPW) is applied for the analysis of magnetic, structural, optical, electronic, and thermoelectric features of X₂MgSe₄ (X= Dy, Tm) spinels within the density functional theory (DFT). Structural and thermodynamic stabilities are confirmed through the computation of tolerance factor (0.77) and formation enthalpies (-ve) for both spinels. Dy₂MgSe₄ behaves as a semiconductor with a 1.5 eV direct bandgap (E_g) in the majority spin state but as a metal in the minority spin state, resulting in its half-metallic ferromagnetic (HMF) nature. While Tm₂MgSe₄ demonstrated a semi-conducting nature in both spin up/down channels, with E_g of 1.41/1.34 eV, respectively. Absorption spectrum displays linear trend with peaks appearing at 6.10 eV for Dy₂MgSe₄ and 6.46 eV for Tm₂MgSe₄. Since peaks are appeared in the Ultraviolet (UV) region making them suitable materials for various optoelectronic application, including optical memory devices, sensors and optical filters. The calculated ZT values are 0.77 (at 800 K) and 0.766 (at 300 K), for Dy₂MgSe₄ and Tm₂MgSe₄, correspondingly. Overall, the study of X₂MgSe₄ (X = Dy, Tm) has shown a great potential for their potential usage in energy harvesting and spintronic applications.