Abstract Through simultaneously enhancing the power factor by engineering the extra light band and enhancing phonon scatterings by introducing a high density of stacking faults, a record figure‐of‐merit over 2.0 is achieved in p‐type AgSbTe 2− x Se x alloys. Density functional theory calculations confirm the presence of the light valence band with large degeneracy in AgSbTe 2 , and that alloying with Se decreases the energy offset between the light valence band and the valence band maximum. Therefore, a significantly enhanced power factor is realized in p‐type AgSbTe 2− x Se x alloys. In addition, transmission electron microscopy studies indicate the appearance of stacking faults and grain boundaries, which together with grain boundaries and point defects significantly strengthen phonon scatterings, leading to an ultralow thermal conductivity. The synergetic strategy of simultaneously enhancing power factor and strengthening phonon scattering developed in this study opens up a robust pathway to tailor thermoelectric performance.