Efficiency in generation and utilization of energy is highly dependent on materials that have the ability to amplify or hinder thermal conduction processes. A comprehensive understanding of the relationship between chemical bonding and structure impacting lattice waves (phonons) is essential to furnish compounds with ultralow lattice thermal conductivity (κ lat) for important applications such as thermoelectrics. Here, we demonstrate that the n-type rock-salt AgPbBiSe3 exhibits an ultra-low κ lat of 0.5-0.4 W m-1 K-1 in the 290-820 K temperature range. We present detailed analysis to uncover the fundamental origin of such a low κ lat. First-principles calculations augmented with low temperature heat capacity measurements and the experimentally determined synchrotron X-ray pair distribution function (PDF) reveal bonding heterogeneity within the lattice and lone pair induced lattice anharmonicity. Both of these factors enhance the phonon-phonon scattering, and are thereby responsible for the suppressed κ lat. Further optimization of the thermoelectric properties was performed by aliovalent halide doping, and a thermoelectric figure of merit (zT) of 0.8 at 814 K was achieved for AgPbBiSe2.97I0.03 which is remarkable among n-type Te free thermoelectrics.