Thermoelectric (TE) materials convert heat energy directly into electricity, and introducing new materials with high conversion efficiency is a great challenge because of the rare combination of interdependent electrical and thermal transport properties required to be present in a single material. The TE efficiency is defined by the figure of merit ZT=(S2σ) T/κ, where S is the Seebeck coefficient, σ is the electrical conductivity, κ is the total thermal conductivity, and T is the absolute temperature. A new p‐type thermoelectric material, CsAg5Te3, is presented that exhibits ultralow lattice thermal conductivity (ca. 0.18 Wm−1 K−1) and a high figure of merit of about 1.5 at 727 K. The lattice thermal conductivity is the lowest among state‐of‐the‐art thermoelectrics; it is attributed to a previously unrecognized phonon scattering mechanism that involves the concerted rattling of a group of Ag ions that strongly raises the Grüneisen parameters of the material. A p‐type thermoelectric material, CsAg5Te3, is presented. It exhibits ultralow thermal conductivity (ϰtol≈0.18 Wm−1 K−1) and a high figure of merit (ZT≈1.5 at 727 K). The low thermal conductivity is attributed to a previously unrecognized phonon scattering mechanism that involves the rattling of Ag ions, strongly raising the Grüneisen parameters of the material.