SnTe exhibits poor thermoelectric figure of merit owing to Sn vacancies that give rise to a low p-type Seebeck coefficient and high electrical−thermal conductivities. Here, we reported thermoelectric properties of a composite material synthesized by vacuum hot pressing a mixture of preformed p-type SnTe and n-type PbTe. Detailed characterization revealed that the composite material has SnTe alloyed with PbTe along with n-PbTe nanoinclusions. The cumulative effect of alloyinginduced valence band convergence along with energy filtering of charge carriers at the SnTe−PbTe (p−n) interface resulted in an enhanced Seebeck coefficient in the composite material. A significant lowering of thermal conductivity was achieved by phonon scattering at coherent nano p−n junctions and substitution point defects due to alloying. The high Seebeck coefficient along with depressed thermal conductivity in the composite (SnTe)_0.5(PbTe)_0.5 resulted in the highest figure of merit (ZT) of ∼1.2 at 750 K (i.e., 724% higher compared to pure SnTe) and average ZT of ∼0.5 in a temperature range of 300−750 K. A single-leg thermoelectric power generator fabricated using optimized (SnTe)_0.5(PbTe)_0.5 showed a conversion efficiency of ∼4.9% for a temperature difference of 400 K.