The structural, magnetic, electrical and thermal transport properties have been investigated in two-dimensional layered perovskite Sr1.05Ln0.95CoO4 (Ln = La, Ce and Nd) compounds. The variations of Jahn–Teller distortion of the CoO6 octahedron and the effective magnetic moment indicate that the induced holes are mostly accommodated in the t2g orbital states keeping the intermediate-spin configuration. The detailed comparison of temperature dependence of magnetization, resistivity, thermoelectric power and thermal conductivity suggests that the tolerance factor t plays a very crucial role in the transport behaviours. With decreasing A-site rare earth ionic radius , the tolerance factor t decreases and the distortion of CoO6 octahedron enhances, which leads to the increased bending of the Co–O–Co bond, the narrowing of the bandwidth and the decrease in the mobility of eg electrons. In addition, from the viewpoint of application, the huge Seebeck coefficients (>600 µV K−1) indicate that the present layered cobaltites can be good candidates for thermoelectric materials.