AbstractSynergetic optimization of electrical and thermal transport properties is achieved for SnTe‐based nano‐crystalline materials. Gd doping is able to suppress the Sn vacancy, which is confirmed by positron annihilation measurements and corresponding theoretical calculations. Hence, the optimal hole carrier concentration is obtained, leading to the improvement of electrical transport performance and simultaneous decrease of electronic thermal conductivity. In addition, the incremental density of states effective mass m* in SnTe is realized by the promotion of the band convergence via Gd doping, which is further confirmed by the band structure calculation. Hence, the enhancement of the Seebeck coefficient is also achieved, leading to a high power factor of 2922 µW m−1 K−2 for Sn0.96Gd0.04Te at 900 K. Meanwhile, substantial suppression of the lattice thermal conductivity is observed in Gd‐doped SnTe, which is originated from enhanced phonon scattering by multiple processes including mass and strain fluctuations due to the Gd doping, scattering of grain boundaries, nano‐pores, and secondary phases induced by Gd doping. With the decreased phonon mean free path and reduced average phonon group velocity, a rather low lattice thermal conductivity is achieved. As a result, the synergetic optimization of the electric and thermal transport properties contributes to a rather high ZT value of ≈1.5 at 900 K, leading to the superior thermoelectric performance of SnTe‐based nanoscale polycrystalline materials.