We investigated the thermoelectric (TE) properties of GeTe by incorporating Bi2Te3 in the GeTe system. The addition of Bi2Te3 into the GeTe matrix leads to phonon scattering caused by stacking fault or structural defect, resulting in a substantial reduction in lattice thermal conductivity κlat. We observed a significant decrease in total thermal conductivities in the vertical and horizontal pressing directions, respectively. The optimized carrier properties and low thermal conductivity in the composites have led to a remarkable improvement in the dimensionless figure of merit (zT) 1.26 at 650 K. This study highlights the potential for creating high-performance thermoelectric materials through GeTe-Bi2Te3 compounds, emphasizing the importance of defect engineering and stacking faults in reducing thermal conductivity and improving thermoelectric efficiency.