Herein, a high figure of merit (ZT) of ≈1.7 at 823 K is reported in p‐type polycrystalline Cd‐doped SnSe by combining cation vacancies and localized‐lattice engineering. It is observed that the introduction of Cd atoms in SnSe lattice induce Sn vacancies, which act as p‐type dopants. A combination of facile solvothermal synthesis and fast spark plasma sintering technique boosts the Sn vacancy to a high level of ≈2.9%, which results in an optimum hole concentration of ≈2.6 × 1019 cm−3 and an improved power factor of ≈6.9 µW cm−1 K−2. Simultaneously, a low thermal conductivity of ≈0.33 W m−1 K−1 is achieved by effective phonon scattering at localized crystal imperfections, as observed by detailed structural characterizations. Density functional theory calculations reveal that the role of Cd atoms in the SnSe lattice is to reduce the formation energy of Sn vacancies, which in turn lower the Fermi level down into the valence bands, generating holes. This work explores the fundamental Cd‐doping mechanisms at the nanoscale in a SnSe matrix and demonstrates vacancy and localized‐lattice engineering as an effective approach to boosting thermoelectric performance. The work provides an avenue in achieving high‐performance thermoelectric properties of materials. High figure of merit (ZT) of ≈1.7 at 823 K is achieved in p‐type Cd‐doped SnSe microplates via tuning high‐carrier concentration of ≈2.6 × 1019 cm−3 by improving cation vacancy rate and realizing low thermal conductivity of ≈0.33 W m−1 K−1 by inducing intensive local crystal defects, including lattice distortions, dislocations, and point defects. [ABSTRACT FROM AUTHOR]