Energy transport in nanostructures differs significantly from macrostructures because of classical and quantum size effects on energy carriers. Experimental results show that the thermal conductivity values of nanostructures such as superlattices are significantly lower than that of their bulk constituent materials. The reduction in thermal conductivity led to a large increase in the thermoelectric figure of merit in several superlattice systems. Materials with a large thermoelectric figure of merit can be used to develop efficient solid-state devices that convert waste heat into electricity. Superlattices grown by thin-film deposition techniques, however, are not suitable for large scale applications. Nanocomposites represent one approach that can lead to high thermoelectric figure merit. This paper reviews the current understanding of thermal conductivity reduction mechanisms in superlattices and presents theoretical studies on thermoelectric properties in semiconducting nanocomposites, aiming at developing high efficiency thermoelectric energy conversion materials.