Indium oxides such as In2O3 based thermoelectric ceramics exhibit a figure of merit ZT ~0.5 above 1000 K, while optimized ZnO based thermoelectrics may reach ZT ~0.3 at 1273 K. A way to further optimize the thermoelectric performance is to tune the thermal conductivity. In this work, a reduction of the thermal conductivity greater than 30% has been observed. Combining thermal conductivity measurements, Scanning Electron Microscopy (SEM) images, X-ray Absorption Fine-structure spectroscopy (XAFS) data and Full Multiple Scattering calculations, we associated the phenomenon with an effective scattering of mid- and long-wavelength phonons by embedded ZnO nano-inclusions in the In2O3 matrix. The results suggest a protocol for the synthesis of new heat-designed materials for many novel applications, such as high ZT thermoelectrics, thermal crystals, heat optics devices, etc.