SiGe is one of the most widely used thermoelectric materials for radioisotope thermoelectric generator applications for harnessing waste-heat at high temperatures. In the present study, we report a simple experimental strategy for enhancing the thermoelectric and mechanical properties of n-type SiGe nanoalloys by dispersing SiC nanoparticles in a SiGe nanoalloy matrix. This strategy yielded a high value of figure-of-merit (ZT) of ∼1.7 at 900 °C in the SiGe/SiC nanocomposite, which is nearly twice that reported for its pristine bulk counterpart and ∼15% higher than that of pristine SiGe nanoalloys. This significant enhancement in the ZT primarily originates from a reduction in the lattice thermal conductivity, owing to a high density of nano-scale interfaces, lattice-scale modulations and mass fluctuations, which lead to extensive scattering of heat-carrying phonons. The dispersion of SiC nanoparticles also significantly enhances the mechanical properties of the resulting SiGe/SiC nanocomposite, including fracture toughness and hardness. The enhancement in the thermoelectric and mechanical properties of the SiGe/SiC nanocomposites has been correlated with their microstructural features, elucidated employing X-ray diffraction, and scanning and transmission electron microscopy.