Inspired by the excellent thermal transport properties of layered BiCuOX (X = S, Se, Te) materials, the electronic structure, mechanical, and thermal transport properties of isostructural Ag-based BiAgOTe material are investigated using the first-principles calculations in combination with the Boltzmann transport theory. Layered BiAgOTe material is an indirect bandgap semiconductor with a bandgap of 1.19 eV using the Heyd− Scuseria−Ernzerhof (HSE06) functional. The elastic constants and shear modulus of the BiAgOTe material satisfy the Born−Huang criterion, highlighting the high mechanical stability and pronounced shear resistance. Phonon dispersion curves and ab initio molecular dynamics simulations also demonstrate the high dynamic and thermal stabilities of the BiAgOTe material. Due to the specificity of the layered configuration, the BiAgOTe material exhibits pronounced anisotropy in lattice thermal conductivity and mechanical properties along the a-and c-directions. The weak interlayer interactions, coupled with a low Young's modulus, give rise to significant anharmonicity in the BiAgOTe compound. The strong phonon scattering rate, large Gruneisen parameter, and small phonon group velocity result in a low lattice thermal conductivity of 0.62 W/mK at 300 K in consideration of four-phonon scattering. The current work not only provides a fundamental theoretical insight into the thermal transport properties but also provides theoretical guidance for the practical thermal application of the BiAgOTe material.