Low-temperature electronic and thermal transport measurements are carried out on nanostructured Zn1−xAlxTe (0 ⩽ x ⩽ 0.15) fabricated using hydrothermal synthesis followed by evacuated-and-encapsulated sintering. A single parabolic band with acoustic phonon scattering is used to analyze thermoelectric transport data. It is found that reduced Fermi energy gets closer to the valence band edge and density of states effective mass, effective density of states, and Hall factor decrease with increasing x in doped samples. The chemical carrier concentration, carrier density independent mobility, β, and theoretical zT values increase with increasing x in doped samples. The nanostructured Zn1−xAlxTe exhibits significant reduction of thermal conductivity at 300 K (1.82–3.71 W m−1 K−1) as compared to bulk ZnTe (18 W m−1 K−1). The point-defect scattering and phonon-grain scattering play an important role in reducing the lattice thermal conductivity. In addition, partial substitution of Al3+ for Zn2+ significantly improves both the power factor and zT values.