The advantage of secondary-phase induced carrier filtering on the thermoelectric properties has paved the way for developing cost-effective, highly efficient thermoelectric materials. Here, we report a very high thermoelectric figure-of-merit of skutterudite nanocomposites achieved by tailoring interface carrier filtering. The single-filled skutterudite nanocomposites are prepared by dispersing rare-earth oxides nanoparticles (Yb 2 O 3 , Sm 2 O 3 , La 2 O 3 ) in the skutterudite (Dy 0.4 Co 3.2 Ni 0.8 Sb 12 ) matrix. The nanoparticles/skutterudite interfaces act as efficient carrier filters, thereby significantly enhancing the Seebeck coefficient without compromising the electrical conductivity. As a result, the highest power factor of ∼6.5 W/mK 2 is achieved in the skutterudite nanocomposites. The nonuniform strain distribution near the nanoparticles due to the local lattice misfit and concentration fluctuations affect the heat carriers and thereby reduce the lattice thermal conductivity. Moreover, the three-dimensional atom probe analysis reveals the formation of Ni-rich grain boundaries in the skutterudite matrix, which also facilitates the reduction of lattice thermal conductivity. Both the factors, i.e., the reduction in lattice thermal conductivity and the enhancement of the power factor, lead to an enormous increase in ZT up to ∼1.84 at 723 K and an average ZT of about 1.56 in the temperature range from 523 to 723 K, the highest among the single-filled skutterudites reported so far.