Crystalline solids with intrinsically low lattice thermal conductivity (κL) are crucial to realizing high‐performance thermoelectric (TE) materials. Herein, we show an ultralow κL of 0.35 Wm−1 K−1 in AgCuTe, which has a remarkable TE figure‐of‐merit, zT of 1.6 at 670 K when alloyed with 10 mol % Se. First‐principles DFT calculation reveals several soft phonon modes in its room‐temperature hexagonal phase, which are also evident from low‐temperature heat‐capacity measurement. These phonon modes, dominated by Ag vibrations, soften further with temperature giving a dynamic cation disorder and driving the superionic transition. Intrinsic factors cause an ultralow κL in the room‐temperature hexagonal phase, while the dynamic disorder of Ag/Cu cations leads to reduced phonon frequencies and mean free paths in the high‐temperature rocksalt phase. Despite the cation disorder at elevated temperatures, the crystalline conduits of the rigid anion sublattice give a high power factor.