The effect of substitution of Fe3+ ions by Mn3+ ions on crystal structure, lattice dynamic, heat capacity and magnetic properties in TbMn1-xFexO3 ceramics has been studied. X-ray powder diffraction and Raman spectroscopy revealed that lattice distortion can be mainly attributed to Jahn-Teller distortion and tilting of octahedrons for samples with x < 0.4; for higher Fe concentration, the distortions are dominated by the octahedra tilting with less contribution of the Jahn-Teller effect. The anomalies in heat capacity of parent compounds (TbMnO3 and TbFeO3), which are associated with magnetic transitions, are smeared out by ion substitution. Magnetization measurements indicate that magnetic ordering persists in whole concentration range. The butterfly-type magnetic hysteresis loops suggest that the magnetic ground state of the whole system is complex and thence interesting for next experimental and theoretical studies.