Two types of Bi0.4Sb1.6Te3 powder exhibiting particle and grain-size differences were fabricated using a high-energy ball milling process. The mixtures at different ratios were consolidated by vacuum hot pressing to produce nano-/micro-structured composites with the same chemical compositions. Measurements of the Seebeck coefficient, electrical resistivity, and thermal conductivity provided a ZT value as high as 1.19 at 373 K for a sample containing 40% nanograin powders. This ZT value is higher than that of the monolithic nanostructured Bi0.4Sb1.6Te3 sample. The ZT values of this sample at a temperature ranging between 400 and 495 K are between 1.0 and 1.1. Such ZT characteristics make the ZT value suitable for power generation applications because no other materials with a similarly high ZT value have been observed in this temperature range. The achieved higher ZT value is potentially attributed to the unique nano-/micro-structures, in which the dispersed nanograin powders can increase phonon scattering sites and reduce thermal conductivity. Furthermore, the existence of micropowders can provide fast carrier transportation network that enhances electrical conductivity. The results indicated that the nano-/micro-structured Bi0.4Sb1.6Te3 alloy can serve as a high-performance material for application in thermoelectric (TE) devices.