We report the enhanced thermoelectric properties of Ce-doped AgSbTe2 (AgSb1-xCexTe2) compounds. As the Ce contents increased, the proportion of heterophase Ag2Te in the AgSbTe2 gradually decreased, along with the size of the crystals. The electrical resistivity and Seebeck coefficient were dramatically affected by Ce doping and the lattice thermal conductivity was reduced. The presence of nanostructured Ag2Te heterophases resulted in a greatly enhanced dimensionless figure of merit, ZT of 1.5 at 673 K. These findings highlight the importance of the heterophase and doping control, which determines both electrical and thermal properties.