Thermoelectric power can convert heat and electricity directly and reversibly. Low-dimensional thermoelectric materials, particularly thin films, have been considered a breakthrough for separating electronic and thermal transport relationships. In this study, a series of Bi0.5Sb1.5Te3 thin films with thicknesses of 0.125, 0.25, 0.5, and 1 μm have been fabricated by RF sputtering for the study of thickness effects on thermoelectric properties. We demonstrated that microstructure (texture) changes highly correlate with the growth thickness in the films, and equilibrium annealing significantly improves the thermoelectric performance, resulting in a remarkable enhancement in the thermoelectric performance. Consequently, the 0.5 μm thin films achieve an exceptional power factor of 18.1 μWcm−1K−2 at 400 K. Furthermore, we utilize a novel method that involves exfoliating a nanosized film and cutting with a focused ion beam, enabling precise in-plane thermal conductivity measurements through the 3ω method. We obtain the in-plane thermal conductivity as low as 0.3 Wm−1K−1, leading to a maximum ZT of 1.86, nearing room temperature. Our results provide significant insights into advanced thin-film thermoelectric design and fabrication, boosting high-performance systems.