The bulk (Bi0.2iSb0.8)2Te3 thermoelectric alloys added with Ag up to 2.0 mass% were prepared by mechanical alloying and pulse discharge sintering (MA-PDS). Microstructures of the sintered samples were investigated. In the two samples with 1.0 and 2.0 mass% Ag, an abnormal growth of the (Bi,Sb)2Te3 phase, manifested by the formation of coarse crystals that are visible with eye, has been revealed during the PDS process of the alloyed powders. The local temperature rise in the compact induced by the compositional fluctuation as a result of Ag addition was suggested to be responsible for the observed abnormal growth. In addition, the electrical transport properties, i.e., electrical resistivity and Seebeck coefficient, of the sintered samples were studied.