•High-performance layered Bi2Se0.5Te2.5 thin films fabricated.•Structure-induced defects regulate high power factor.•Enhanced thermal stability achieved through structural tuning of thin films.•nReduced variation between highest and lowest seebeck coefficients.•Increased high-temperature power factor to 28 × 10−4 W m−1K−2. Bi2Te3-based n-type thin films with high thermoelectric performances are typically synthesised through the formation of dense structures, a process conventionally conducted at high temperatures. However, this method compromises thermal stability. In this study, structural design and multiple-step annealing were employed to enhance the thermal stability of high-performance Bi2Se0.5Te2.5 thin films. Post-annealing, the disparity in the values of the Seebeck coefficient over the entire test temperature range, was reduced to 20 μV K−1, which is approximately 32 % compared to pre-annealing measurements. The layered Bi2Se0.5Te2.5 thin film demonstrated an elevated power factor (28 × 10−4 W m−1K−2), which was maintained across a broad temperature spectrum. This multiple-step annealing approach not only refines the structural integrity by extending the atomic diffusion duration but also mitigates defects and augments compositional uniformity at reduced temperatures. Consequently, layered Bi2Se0.5Te2.5 films emerge as promising candidates for thermoelectric materials, offering enhanced long-term stability for diverse applications, including electric and hybrid electric vehicles, and portable electronic devices.