The Te-free compound Bi2SeS2 is considered as a potential thermoelectric material with less environmentally hazardous composition. Herein, the effect of iodine (I) substitution on its thermoelectric transport properties was studied. The electrical conductivity was enhanced due to the increased carrier concentration caused by the carrier provided defect Ise. Thus, an enhanced power factor over 690 μWm−1K−2 was obtained at 300 K by combining a moderate Seebeck coefficient above 150 µV/K due to its large effective mass, which indicated iodine was an effective n-type dopant for Bi2SeS2. Furthermore, a large drop in the lattice thermal conductivity was observed due to the enhanced phonon scattering caused by nanoprecipitates, which resulted in a low total thermal conductivity (<0.95 Wm−1K−1) for all doped samples. Consequently, a maximum ZT value of 0.56 was achieved at 773 K for a Bi2Se1−xIxS2 (x = 1.1%) sample, a nearly threefold improvement compared to the undoped sample.