Half‐Heusler (HH) alloys are among the best promising thermoelectric (TE) materials applicable for the middle‐to‐high temperature power generation. Despite of the large thermoelectric power factor and decent figure‐of‐merit ZT (≈1), their broad applications and enhancement on TE performance are limited by the high intrinsic lattice thermal conductivity (κL) due to insufficiencies of phonon scattering mechanisms, and the fewer powerful strategies associated with the microstructural engineering for HH materials. This study reports a bottom‐up nanostructure synthesis approach for these HH materials based on the displacement reaction between metal chlorides/bromides and magnesium (or lithium), followed by vacuum‐assisted spark plasma sintering process. The samples are featured with dense dislocation arrays at the grain boundaries, leading to a minimum κL of ≈1 W m−1 K−1 at 900 K and one of the highest ZT (≈1) and predicted η (≈11%) for n‐type Hf0.25Zr0.75NiSn0.97Sb0.03. Further manipulation on the dislocation defects at the grain boundaries of p‐type Nb0.8Ti0.2FeSb leads to enhanced maximum power factor of 47 × 10−4 W m−1 K−2 and the predicted η of ≈7.5%. Moreover, vanadium substitution in FeNb0.56V0.24Ti0.2Sb significantly promotes the η to ≈11%. This strategy can be extended to a broad range of advanced alloys and compounds for improved properties.