The thermoelectric properties of Pb9.6SbyTe 10-xSex were investigated in the intermediate temperature range of 300 - 700 K. The effect of the variation of Sb content (y) on the electronic properties of the materials is remarkable. Samples with compositions Pb9.6Sb0.2Te10-x Sex (y = 0.2) show the best combination of low thermal conductivity with moderate electrical conductivity and thermopower. For Pb9.6Sb0.2Te xSe2 (x = 2) a maximum figure of merit of ZT∼ 1.1 was obtained around 700 K. This value is nearly 1.4 times higher than that of PbTe at 700 K. This enhancement of the figure of merit of Pb9.6Sb 0.2Te8Se2 derives from its extremely low ! thermal conductivity (-0.7 at W/m.K at 700 K). High resolution transmission electron microscopy of Pb9.6Sb0.2Te10-xSe x samples shows broadly distributed Sb-rich nanocrystals, which may be the key feature responsible for the suppression of the thermal conductivity.