The series of Pb9.6Sb0.2Te10-xSex compounds with different Se content (x) were prepared, and their structure was investigated at the atomic and nanosized regime level. Thermoelectric properties were measured in the temperature range from 300 to 700 K. The Pb9.6Sb0.2Te10-xSex series was designed after the refinement of the single-crystal structure of Pb3.82Sb0.12Te4 (Pb9.6Sb0.3Te10; S. G. Pm (3) over barm) by substituting isoelectronically in anion positions Te by Se. The Pb9.6Sb0.2Te10-xSex compounds show significantly lower lattice thermal conductivity (kappa(L)) compared to the well-known PbTe1-xSex solid solutions. For Pb9.6Sb0.2Te3Se7 (x = 7), a kappa(L) value as low as 0.40 W/m, K was determined at 700 K. High-resolution transmission electron microscopy of several Pb9.6Sb0.2Te10-x Se-x samples showed widely distributed Sb-rich nanocrystals in the samples which is the key feature for the strong reduction of the lattice thermal conductivity. The reduction of kappa(L) results in a significantly enhanced thermoelectric figure of merit of Pb9.6Sb0.2Te10-xSex compared to the corresponding PbTe1-x Se x solid solution alloys. For Pb9.6Sb0.2Te3Se7 (x = 7), a maximum figure of merit of ZT approximate to 1.2 was obtained at similar to 650 K. This value is about 50% higher than that of the state-of-the-art n-type PbTe. The work provides experimental validation of the theoretical concept that embedded nanocrystals can promote strong scattering of acoustic phonons.