The approach of using segmented legs to build thermoelectric (TE) modules can enhance the performance of TE generators. This approach is based on the selection of materials for different segments that are optimized in terms of their TE properties with respect to the temperature range to which they are exposed during module operation. For this purpose, by carefully controlling the chemical composition of ternary and quaternary bismuth-telluride-based alloys, we have optimized the figure of merit ZT of p-type and n-type alloys implemented by a powder technology approach. The alloys were prepared by mechanical alloying followed by hot extrusion, and their mechanical and TE properties were fully characterized as a function of temperature, which gave us a solid database for simulation of modules containing these materials. Finite-element numerical simulation was applied to evaluate the impact of TE materials properties on the level of mechanical stresses generated by thermal gradients in modules made of segmented legs. Keeping the same total length of two-segment p- and n-type legs, the relative length of each segment was varied to obtain an 8% relative increase of generated electrical power compared with homogeneous legs of the same total length. Under these conditions, the presence of solder interface between the two segments and between the segments and the copper conductors of the module concentrates plastic strain, leading to a significant reduction of the stress level in the TE materials compared with that resulting from using nonsegmented legs. Leg segmentation not only leads to improved TE performance but could also significantly modify the maximum values and distribution of thermomechanical stresses in the modules, depending on how it is realized. The study presents how this numerical simulation tool can be used to optimize the design of segmented modules.