CuGaTe2 is a promising thermoelectric (TE) material for high temperature TE applications. This work systematically investigated the structural, elastic and thermodynamic properties of Cu1−xAgxGaTe2 (x = 0, 0.25, 0.5, 0.75 and 1) by density functional theory. The calculated lattice volume is expanded with the increase of Ag content, but this expansion is anisotropic. The lattice parameter along a-axis is linear expansion, and along c-axis is parabolic expansion, which is in good agreement with available experimental data. The phase stability of Cu1−xAgxGaTe2 alloy is studied by analyzing the formation energy, cohesive energy and elastic constants. Shear modulus, Young’s modulus, sound velocities, Debye temperature and the minimum thermal conductivity are obtained from the calculated elastic constants. The results show that Ag substitution could reduce the lattice thermal conductivity, which is helpful for improving the TE properties of CuGaTe2.