Herein, we investigated the thermoelectric properties of Fe-BTS (Bi 2 Te 3 -based compound) samples fabricated through nanometal decoration and spark plasma sintering. We examined the effects of Fe nanoparticle (NP) addition on the power factor (PF), thermal conductivity (κ), and figure of merit (ZT) of the samples. The incorporation of Fe NPs led to a significant increase in the PF of the Fe-BTS samples, surpassing the performance of the pristine sample by over 34%. This improvement is attributed to the combined effects of carrier concentration tuning and low-energy carrier filtering. Additionally, the thermal conductivity of the Fe-BTS samples was significantly reduced due to enhanced phonon scattering at the increased interfaces. Consequently, a maximum ZT value of 1.09 was achieved at 363 K for the Fe-BTS sample with an Fe content of 0.3 vol %. These findings highlight the crucial role of interface engineering in enhancing the thermoelectric properties of materials.