In this study, Bi-Sb-Te thermoelectric materials are produced by mechanical alloying (MA) and spark plasma sintering (SPS). To examine the influence of the milling atmosphere on the microstructure and thermo-electric (TE) properties, a p-type Bi-Sb-Te composite powder is mechanically alloyed in the presence of argon and air atmospheres. The oxygen content increases to 55% when the powder is milled in the air atmosphere, compared with argon. All grains are similar in size and uniformly, distributed in both atmospheric sintered samples. The Seebeck coefficient is higher, while the electrical conductivity is lower in the MA (Air) sample due to a low carrier concentration compared to the MA (Ar) sintered sample. The maximum figure of merit (ZT) is 0.91 and 0.82 at 350 K for the MA (Ar) and MA (Air) sintered samples, respectively. The slight enhancement in the ZT value is due to the decrease in the oxygen content during the MA (Ar) process. Moreover, the combination of mechanical alloying and SPS process shows a higher hardness and density values for the sintered samples.