P-type silicon germanium (SiGe) alloys, Si80Ge20B0.6, with homogeneously dispersed SiC nanoparticles were prepared by ball milling and subsequent spark plasma sintering. The influence of grain size reduction of SiGe matrix and SiC nanoparticle dispersion on electrical and thermal transport properties were investigated. A significant reduction in lattice thermal conductivity is achieved by a more pronounced grain boundary scattering of phonons introduced by grain size reduction after ball milling. Dispersing SiC nanoparticles in the Si80Ge20B0.6 matrix effectively reduces the conduction of heat by providing additional phonon scattering centers. A dimensionless figure-of-merit (ZT) of 0.62 at 1000 K is obtained in nanostructuring Si80Ge20B0.6 incorporated with only 0.5vol% SiC nanoparticles, which is 17% higher than the parent Si80Ge20B0.6 matrix and about 30% higher than p-type SiGe alloy used in the radioisotope thermoelectric generator in space missions.