Single-phase polycrystalline powders of Fe1-xSnxSb2Se4 (x = 0 and 0.13) were synthesized by a solid-state reaction of the elements at 773 K. X-ray diffraction on Fe0.87Sn0.13Sb2Se4 single-crystal and powder samples indicates that the compound is isostructural to FeSb2Se4 in the temperature range from 80 to 500 K, crystallizing in the monoclinic space group C2/m (No. 12). Electron-transport data reveal a marginal alteration in the resistivity, whereas the thermopower drops by similar to 60%. This suggests a decrease in the activation energy upon isoelectronic substitution of 13% Fe by Sn. Magnetic susceptibility and magnetization measurements from 2 to 500 K reveal that the Fe1-xSb2SnxSe4 phases exhibit ferromagnetic behavior up to similar to 450 K (x = 0) and 325 K (x = 0.13). Magnetotransport data for FeSb2Se4 reveal large negative magnetoresistance, suggesting spin polarization of free carriers in the sample. The high-T-c ferromagnetism in Fe1-xSnxSb2Se4 phases and the decrease in Tc of the Fe0.87Sn0.13Sb2Se4 sample are rationalized by taking into account (1) the separation between neighboring magnetic centers in the crystal structures and (2) the formation of bound magnetic polarons, which overlap to induce long-range ferromagnetic ordering.