Abstract An innovative strategy is discovered to enhance the properties of bismuth‐tellurium‐based thermoelectric materials, aiding their development in power generation and solid‐state refrigeration. The incorporation of trace Yb into the Bi 0.4 Sb 1.6 Te 3 alloy significantly enhances its thermoelectric performance, notably boosting electrical transport properties through the induction of band splitting, resulting in a superior power factor 53 µW cm −1 K −2 at room‐temperature and the figure of merit zT values 1.46 at 373 K. Second, Tin (Sn) doping is further introduced to create resonant levels. The microstructural analysis revealed that the coexistence of grain boundaries, nanoscale precipitates, and many stacking faults significantly increases the number of phonon‐scattering sites, leading to an effective reduction in the lattice thermal conductivity. Consequently, the peak value of zT for the Yb & Sn co‐doped p‐type bismuth telluride reaches 1.48 at 373 K. Moreover, a single‐leg power generation module fabricated from Material 1 is developed, achieving a conversion efficiency of 6.35% at a temperature difference of 214 K, and an eight‐pair cooling module made from Material 2 demonstrated a cooling temperature difference of 75.8 K at a load of 350 K.