Understanding the nature of chemical bonding and lattice dynamics together with their influence on phonon-transport is essential to explore and design crystalline solids with ultralow thermal conductivity for various applications including thermoelectrics. TlInTe2, with interlocked rigid and weakly bound substructures, exhibits lattice thermal conductivity as low as ca. 0.5 W/mK near room temperature, owing to rattling dynamics of weakly bound Tl cations. Large displacements of Tl cations along the c-axis, driven by electrostatic repulsion between localized electron clouds on Tl and Te ions, are akin to those of rattling guests in caged-systems. Heat capacity of TlInTe2 exhibits a broad peak at low temperatures due to contribution from Tl-induced low frequency Einstein modes as also evidenced from THz time domain spectroscopy. First-principles calculations reveal a strong coupling between large-amplitude coherent optic vibrations of Tl-rattlers along the c-axis, and acoustic phonons that likely causes the low lattice thermal conductivity in TlInTe2.