α-MgAgSb is an environmentally friendly alternative to traditional tellurium-based thermoelectric materials for near room temperature applications. In this study, we enhance the thermoelectric properties of α-MgAgSb by introducing a secondary Sb₂Te₃ phase using powder atomic layer deposition (powder ALD), with the aim to modify phonon scattering mechanisms and reduce the lattice thermal conductivity. Powder ALD is a thin-film deposition technique that allows for the deposition of self-limiting monolayers on high aspect ratio surfaces, enabling the conformal coating of nanopowder regardless of particle morphology. Sb₂Te₃ was selected as the coating material due to its oxygen-free synthesis route and its potential for good interfacial compatibility with the α-MgAgSb powders. Our results reveal a 10% decrease in lattice thermal conductivity of bulk α-MgAgSb as the powder ALD coating thickness increases from pristine to 20 cycles of Sb₂Te₃, without affecting the primary phase purity. Our findings highlight the effectiveness of nonoxide powder ALD coatings in suppressing lattice thermal transport, offering a promising pathway for interface-engineered, low-toxicity thermoelectric materials.