We report a unique temperature-induced insulator-metal transition in MnB4 that is accompanied by a simultaneous magnetostructural change from a nonmagnetic monoclinic mP20 phase to a magnetic orthorhombic oP10 phase. Such a concurring magnetostructural and insulator-metal transformation is a manifestation of a strong competition between Peierls and Stoner mechanisms that governs a crossover from an electron-pairing to an electron-localization scenario in this system. Therefore, the phase stability of MnB4 is controlled by a subtle interplay among the Peierls mechanism, Stoner mechanism, and phonon free energy. Our findings not only resolve the longstanding magnetostructural puzzle of MnB4 but also provide a realistic system for the Peierls-Hubbard model.