ZnO is identified as a potentially attractive n‐type oxide thermoelectric material due to its abundance, nontoxicity, and a high degree of stability. However, working with ZnO is challenging due to its high thermal conductivity from its strong ionic bonds and low electrical conductivity due to its low charge concentrations. Here, it is demonstrated that the electrical and thermal transport properties of ZnO can be simultaneously improved via the successful doping of Al and ZnS coating. The ZnS coating in Al‐doped ZnO is observed and analyzed through microstructure and spectroscopic studies. The power factor for 1% ZnS‐coated Zn0.98Al0.02O is increased to ≈0.75 mW m−1 K−2 at 1073 K, 161% higher than pure ZnO. This enhancement in the power factor can be explained by the aliovalent Al3+ doping and modifications in intrinsic defects, leading to an increased carrier concentration. Interestingly, ZnS coating significantly reduces lattice thermal conductivity to ≈2.31 W m−1 K−1 at 1073 K for 2% ZnS‐coated Zn0.98Al0.02O, a 62% decrease over pure ZnO. This large reduction in lattice thermal conductivity can be elucidated based on coherent phonon scattering via Callaway's model. Overall, the figure of merit, zT, increases to 0.2 in 2% ZnS‐coated Zn0.98Al0.02O, which is 272% higher than pure ZnO at 1073 K.