In this work, BiSbTe/Al2O3 composites were prepared by incorporation of alumina (with 2, 4, and 6 wt%) particles into the p-type Bi-Sb-Te-gas atomized powders via mechanical milling and, subsequently consolidated by spark plasma sintering (SPS). The Seebeck coefficient was significantly improved (over 41%) at 325 K, while the electrical conductivity was abruptly decreased for 6 wt% Al2O3 added BiSbTe/Al2O3 composites, which was mainly due to the decreases in carrier concentration, and energy filtering of carriers at interfaces. The thermal conductivity was eminently decreased over 27.5% for 6 wt% Al2O3 added BiSbTe/Al2O3 composites, was mainly attributed to the scattering of carriers and phonons at enormous grain boundaries as well as newly formed interfaces. The Vickers hardness of the BiSbTe/Al2O3 composites was improved compared to that of base matrix, and this was attributed to refinement of grains, and to a dispersion strengthening mechanism.