The entanglement quantum properties of a spin-1/2 IsingHeisenberg model on a symmetrical diamond chain were analyzed. Due to the separable nature of the Ising-type exchange interactions between neighboring Heisenberg dimers, calculation of the entanglement can be performed exactly for each individual dimer. Pairwise thermal entanglement was studied in terms of the isotropic IsingHeisenberg model and analytical expressions for the concurrence (as a measure of bipartite entanglement) were obtained. The effects of external magnetic field H and next-nearest neighbor interaction J m between nodal Ising sites were considered. The ground state structure and entanglement properties of the system were studied in a wide range of coupling constant values. Various regimes with different values of ground state entanglement were revealed, depending on the relation between competing interaction strengths. Finally, some novel effects, such as the two-peak behavior of concurrence versus temperature and coexistence of phases with different values of magnetic entanglement, were observed.