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Because of its highest magnetostriction at room temperature, TbFe2 is one of the most promising materials for magnetostrictive applications. However, oxidation-induced deterioration in its magnetic properties limits its usage at higher temperature (T) and/or longer time (t). In this regard, a systematic study is performed here to understand the effect of oxide-film overgrowth (by varying T and t) on the microstructure and magnetic properties of TbFe2. The characteristic parameters of magnetic properties, such as coercivity (Hc) and remanent magnetization (Mr), are found to decrease with increasing T and/or t. Moreover, a strong correlation between the oxidation-induced microstructure and magnetic properties is observed. Understanding developed in this study will help in choosing optimum working conditions (i.e., T and/or t) for TbFe2 to avoid significant deterioration in the magnetic properties. [ABSTRACT FROM AUTHOR]