The conductive polymer polyethylenedioxythiophene doped with polystyrene sulfonate (PEDOT:PSS) is one of the most studied organic thermoelectric materials thanks to its low cost, high electrical conductivity, and biocompatibility. There are conflicting explanations for the changed morphology and the phase segregation of PEDOT and PSS that leads to improved TE performance through alleviating the trade-off between electrical conductivity and Seebeck coefficient (thermoelectric voltage in response to temperature difference). In the study, we demonstrated the TE properties of PEDOT:PSS films were improved by a simple process of sequential hydrothermal annealing and soaking in water, resulting in a simultaneous increase in both electrical conductivity (σ)and Seebeck coefficient (S). The optimized conductivity σ and Seebeck coefficient were ∼1100 S cm −1 and ∼25 μV K -1 , respectively, corresponding to a power factor (PF) of ∼70 μW m -1 K - 2 . Hydrothermal annealing led to a conformational change from a core-shell structure to inter-bridging PEDOT-rich fibres. Soaking minimised the hydrophilic dopant PSS volume that inhibits charge transport. This two-step treatment changed the PEDOT:PSS thin films from hygroscopic to hydrophobic, and increased charge carrier mobility by the removal of PSS-rich regions, phase separation, and conformational and morphological change. The mechanism behind this improved Seebeck coefficient is attributed to a more ordered structure and increased mobility due to physical dedoping, rather than a change in carrier concentration or doping level. This protocol permits tailoring of thermoelectric performance and charge transport employing a more biocompatible treatment that is suitable for mass-production of biocompatible, low-cost biosensors and large-area thermoelectric power generators. • Water-only treatment boosts PEDOT:PSS TE performance • Conductivity and Seebeck increase together to yield a power factor ≈ 70 μW m -1 K -2 • Water selectively removes neutral PSSH, producing interconnected PEDOT-rich nanofibers • Scalable, biocompatible route for flexible thermoelectrics, wearable power and sensors