Reported are the electrical and thermal transport properties of Al-doped zinc oxide sintered in the presence of void forming agents (VFA) such as small carbon or organic polymer particles of several hundreds nanometers in size. Nanosized cavities (nanovoids) thus formed within dense oxide matrices lead to a marked enhancement in the thermopower, showing a large negative maxima at the temperature range around 400-600°C. On the other hand, the formation of the nanovoids scarcely influences the electrical conductivity, if the size of VFA is sufficiently small. Although the reduction of the thermal conductivity is also fairly small, the enhanced thermopower coupled with the virtually unchanged electrical conductivity results in a considerable improvement in the power factor with the maximum value of 40×10-4 W/mK2, being twice as large as that of the completely dense sample without addition of VFA. The ZT value thereby exceeds 0.4, and the operation temperature range markedly expands toward the lower temperatures. Different behavior of the scattering cross sections for electrons and phonons will be discussed.