Lead telluride (PbTe) is an excellent thermoelectric material in the intermediate temperature zone and has been applied to deep space exploration, waste heat recovery and other fields. However, the low thermoelectric conversion efficiency of the n-type PbTe alloys limits its applications. Here, the thermoelectric performances have been enhanced in n-type PbTe alloys through trace bismuth (Bi) and iodine (I) co-doping. The Pb1−xBixTe1−xIx (x = 0.00%, 0.05%, 0.10%, 0.20% and 0.50%) alloys are synthesized in the single phase compounds by a stepwise synthesis method. The carrier concentration has reached an optimal concentration range within the order of 1019 cm−3. The highest absolute Seebeck coefficient of 244 μV/K is obtained for 0.05% doped alloy at 730 K. The highest absolute Seebeck coefficient leads to high power factor for 0.05% doped, especially in low- and middle-temperature range. The highest power factor ∼25 μW K−2 cm−1 has been obtained at 329 K. Complex micro-scale grain boundaries and point defects strongly increase the phonon scattering and then lead to the lowest lattice thermal conductivity of 0.64 W mK−1 at 674 K for x = 0.50%, which is 26% lower than that of pristine PbTe. As a result, the highest figure of merit, zT ∼ 0.9 has been determined in 0.20% doped samples at 725 K. Moreover, the highest average figure of merit, zTave ∼ 0.7 has been achieved in 0.05% doped samples in the 323–723 K temperature range, which is about two or three times higher than reported for single Bi or I doped PbTe samples.