Lead telluride (PbTe) is one of the best thermoelectric materials in the intermediate temperature range, which shows great potential for waste heat recycling. However, its low strength and high brittleness limit its largescale application because the thermoelectric device usually undergoes mechanical vibration, mechanical and/or thermal cycling, and thermal shock in service. In this study, the enhanced mechanical properties and thermoelectric properties of PbTe are realized simultaneously through introducing dispersive transition-metal dichalcogenide MoTe 2 (molybdenum telluride). The in-situformed MoTe 2 precipitations with a size in the range from 2 to 5 μm and the tight and smooth interface between the PbTe matrix and precipitates contribute to the obvious crack deflection, crack bridging, and pull-out of long grains, dissipating more energy during crack propagation and resulting in a tortuous propagation path. Because of the toughening and the dispersion strengthening effect, the compressive strength, bending strength, and fracture toughness of the sample with a composite amount of 1% are 109 MPa and 50 MPa and 0.65 MPa•m 1/2 , respectively, which are increased by about 37, 117, and 67% compared to the Na 0.02 Pb 0.98 Te matrix. Additionally, the in situ MoTe 2 precipitates intensify the interface phonon scattering and thus decrease the lattice thermal conductivity. As a result, the Na 0.02 Pb 0.98 Te-1% MoTe 2 sample achieves a maximum ZT value of 1.46 at 700 K, which is 11% higher than that of Na 0.02 Pb 0.98 Te without any MoTe 2 nanoprecipitation.