In the present investigation, key mechanical design parameters and the thermoelectric performance of powder ball milled spark plasma sintered P-type Bi0·4Sb1·6Te3 material was determined. In particular, the effect of the powder preparation technique on the powder surface oxide layer as well as both the mechanical and thermoelectric properties were determined. All measurements were performed on identically prepared sintered samples in both parallel and perpendicular to the applied sintering pressure. The mechanical properties determined included relative density, uniaxial tensile strength, coefficient of thermal expansion, Young’s modulus, Poisson’s ratio, and shear modulus. The thermoelectric properties measured included the Seebeck coefficient, electrical resistivity, and thermal conductivity. A mechanically agitated reduction facility built in-house was used to reduce the powder surface oxide at 380 °C for 24 h using dry 5% H2 95% Ar. To separate between the annealing and the reduction effects, the P-type (Bi, Sb)2Te3 powder was annealed using highly purified Ar at the same temperature and time as the reduction process. The oxygen content in the sintered P-type samples was then measured using the inert gas fusion technique. The oxygen content was found to be decreased by 35 wt% after 24 h of reduction but did not change significantly after annealing with Ar only relative to the dried powders. The reduction of the surface oxides increased the relative density of the sintered parts from 97.1% to 99.2%. Consequently, the characteristic uniaxial tensile strength increased from 13.9 MPa to 26.3 MPa and from 16.3 MPa to 30.6 MPa in the parallel and the perpendicular directions to the sintering pressure, respectively, for the sintered bodies from the reduced powder. Both the Young’s modulus and the shear modulus increased from 44.3 GPa to 48.7 GPa and 17.8 GPa–19.5 GPa in the parallel direction, respectively, after the reduction treatment and sintering. The figure of merit, ZT, increased from 0.35 to 0.80 and from 0.42 to 1.13 at room temperature (25 °C) in the parallel and the perpendicular directions, respectively, after the surface oxide reduction treatment.