Bi2Te3 based alloys play a dominant role in commercial applications in the fields of thermoelectric energy generation and solid state cooling. By combining the densification of nanostructured powders followed by a two-step hot forging process, hierarchical nanostructured p-type Bi0.5Sb1.5Te3 alloys with good preferred orientation were successfully fabricated. The Seebeck coefficient in the direction perpendicular to the pressing force, which is highly anisotropic, is much greater than that of the material sintered via one-step sintering. Meanwhile, the nanostructure and crystal defects produced during hot forging also contribute to both higher Seebeck coefficient, and lower thermal conductivity due to more effective and preferential scattering of phonons than electrons. As a result, a 50 enhancement of ZT value (from 1 to above 1.5) in the orientated, hierarchical, nanostructured alloys was obtained.