SnTe is an emerging lead-free IV–VI thermoelectric compound, but the high hole concentration, low Seebeck coefficient and high thermal conductivity limit its thermoelectric performance. In this work, we investigated the effect of n-type AgBiSe2 alloying on the electronic and thermal transport of SnTe, which had not been explored before. It was found that the introduction of AgBiSe2 reduced the hole concentration significantly, and improved the Seebeck coefficient in a wide temperature range. The density functional theory calculations confirmed that AgBiSe2 alloying led to a moderate band convergence and an increase in density of state effective mass. The AgBiSe2 alloying also decreased the lattice thermal conductivity due to the enhanced phonon scattering by point defect and nanoscale precipitates. Consequently, these multiple effects synergistically yielded a maximum ZT of 1.02 at 860 K, making SnTe-AgBiSe2 a promising thermoelectric material.