The thermoelectric properties of (GeTe)(x)(AgSbTe(2))(100-x) compounds (x = 75, 80, 85 and 90; TAGS-x) have been studied as a function of temperature from 300 to 720 K. At 720 K the dimensionless figure of merit ZT reaches the state-of-the-art value of 1.53 for TAGS-75 and 1.50 for TAGS-80 and TAGS-85 samples, respectively. But the ZT value of the TAGS-90 sample is only 0.50 at 720 K due to the high carrier concentration. Utilizing high-resolution transmission electron microscope and selected area electron diffraction techniques, we identify a considerable number of nanoscale domains with typical size ∼10 nm in the samples that show high ZT values. It is suggested that the presence of nanoscale domains, like the situation in PbTe-AgSbTe(2) compounds, should make a slight contribution to the low lattice thermal conductivity of TAGS compounds due to the enhanced mid-frequency phonon scattering.