A thermoelectric material having enhanced Seebeck coefficient is characterized by a microstructure comprising nanoscale Pb inclusions dispersed in matrix substantially composed of PbTe. The excess Pb is obtained either by adding Pb in an amount greater than the stoichiometric amount needed to form PbTe, or by adding an additive effective to getter Te so as to produce the desired excess. The method is generally applicable to enhance thermoelectric properties of compounds of Pb, Sn or Ge, and Te, Se, or S.