The microstructures and Seebeck coefficients of thermoelectric alloys in the pseudo-ternary PbTe-Ag2Te-Sb2Te3 system were examined using samples that were compositionally graded by unidirectional solidification by the Bridgman method and diffusion couples. At compositions near the middle of the pseudo-binary PbTe-AgSbTe2 line, a compositionally modulated microstructure has been found. From diffusion couple experiments, it is found that the PbTe-AgSbTe2 system exhibits a miscibility gap at low temperatures while it forms a complete solid solution at high temperatures; the critical temperature is between 400 °C and 450 °C. The modulated microstructure originates from the decomposition of the high-temperature solid solution during cooling. Scanning Seebeck coefficient measurement on these samples covers a wide compositional space of the pseudo-ternary system. The Seebeck coefficient transitions from positive values at AgSbTe2-rich compositions to negative values at PbTe-rich compositions on the pseudo-binary PbTe-AgSbTe2 line. Composition-graded samples prepared by the Bridgman method are thus useful to investigate thermoelectric materials in multi-component systems.