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Bi2Te3‐based alloys have great market demand in miniaturized thermoelectric (TE) devices for solid‐state refrigeration and power generation. However, their poor mechanical properties increase the fabrication cost and decrease the service durability. Here, this work reports on strengthened mechanical robustness in Bi2Te3‐based alloys due to thermodynamic Gibbs adsorption and kinetic Zener pinning at grain boundaries enabled by MgB2 decomposition. These effects result in much‐refined grain size and twofold enhancement of the compressive strength and Vickers hardness in (Bi0.5Sb1.5Te3)0.97(MgB2)0.03 compared with that of traditional powder‐metallurgy‐derived Bi0.5Sb1.5Te3. High mechanical properties enable excellent cutting machinability in the MgB2‐added samples, showing no missing corners or cracks. Moreover, adding MgB2 facilitates the simultaneous optimization of electron and phonon transport for enhancing the TE figure of merit (ZT). By further optimizing the Bi/Sb ratio, the sample (Bi0.4Sb1.6Te3)0.97(MgB2)0.03 shows a maximum ZT of ≈1.3 at 350 K and an average ZT of 1.1 within 300–473 K. As a consequence, robust TE devices with an energy conversion efficiency of 4.2% at a temperature difference of 215 K are fabricated. This work paves a new way for enhancing the machinability and durability of TE materials, which is especially promising for miniature devices. [ABSTRACT FROM AUTHOR]