We study crystal structure, phase transitions and magnetism of pseudo-binary TmxDy1-xAl2 (0 ≤ x ≤ 1) compounds using temperature dependent X-ray powder diffraction, specific heat and magnetization measurements, first principles, and model calculations. In low external magnetic fields, Dy-rich compounds undergo continuous, second-order phase transitions at the respective Curie temperatures, TC. In contrast, the Tm-rich compounds exhibit discontinuous, first-order anomalies in the magnetically ordered states. These sharp transitions correlate with a substantial energy difference between the room temperature cubic and ground state rhombohedral structures of TmAl2. A clear anomaly in the lattice parameter is observed at ∼30 K for x = 0.5, which nearly coincides with TC = 31.2 K. The effective quadrupolar moment of the lanthanides changes sign around x = 0.5, which leads to a nearly zero anisotropy constant and approximately spherical effective 4f charge densities, providing an explanation for the lack of structural distortions below TC for x = 0.5. The calculations confirm [001] as the easy magnetization axis in the ground state tetragonal structure of DyAl2, and reveal collapse of the orbital magnetic moment when the easy magnetization direction changes to [111]. Within the rhombohedral ground state of TmAl2 [111] is the easy magnetization direction.