In this paper, p-type Bi 0.5 Sb 1.5 Te 3 polycrystalline materials have been fabricated by a traditional vacuum melting method, and the effects of cooling rate and MoSi 2 addition on the microstructure, thermoelectric and mechanical performance of the polycrystalline materials have been studied detailedly. It shows that the amount of Te-rich eutectic phase increases and the lamellar microstructure has been refined with the increase of the cooling rate. Due to the combined effect of cooling rate on the carrier concentration and mobility, the air cooled sample has higher figure of merit than the furnace cooled, water cooled and liquid nitrogen cooled samples, and a maximal ZT of 1.02 at 50 °C was obtained for the air cooled polycrystalline sample. Under the same air cooling condition, the inhomogeneous nucleation sites increase with increasing the amount of MoSi 2 particles, therefore the amount of Te-rich eutectic phase increases and the lamellar microstructure get refined, and the thermal conductivity of the sample decreases significantly due to the extra phonon scattering by the refined microstructure and MoSi 2 particles. The resulted figure of merit ZT increases with increasing the amount of MoSi 2 particles, and it decreases with further increasing the MoSi 2 content after attaining the vertex of ZT = 1.33 at 100 °C at a content of 0.2 wt.% MoSi 2 . The flexural strength of the air cooled polycrystalline sample also increases with the amount of MoSi 2 increasing from 0 to 0.3 wt.%, and a nearly 56% enhancement was achieved for the 0.2 wt.% MoSi 2 sample (28.0 MPa) compared with the MoSi 2 free sample. The improvement of flexural strength is in agreement with the Hall–Petch strengthening mechanism due to the lamellar microstructure refinement induced by MoSi 2 .