A series of Ag-doped p-type Agx(Pb0.5Sn0.5)1-xTe compounds is prepared by melting followed by slow-cooling process, and the phase compositions, microstructures and thermoelectric properties are also systematically investigated. The introduction of Ag in Pb/Sn site effectively increases the hole density which is much lower than the theoretically predicated value in the approximation of complete substitution and single acceptor of Ag, in spite of the fact that all samples show finely single phase for the 5% Ag-doped sample. This implies that part of Ag atoms enter into the interstitial sites acting as electron donor to reduce the hole density. With the increase of Ag content, the electrical conductivity increases gradually and the Seebeck coefficient shows an opposite variation tendency, mainly owing to the variation of hole density. Interestingly, the anomalous crossover of Seebeck coefficient at about 450 K indicates the transition of dominating valence valley from light-band to heavy-band while temperature is higher than 450 K. Consequently, due to the optimization of hole density and the domination of heavy band with large effective mass, 1% Ag-doped sample obtains a highest power factor of 2.1 mWm-1K-2 at 750 K, which results in a highest ZT of 1.05 combined with the suppressed lattice thermal conductivity via intensifying point defect phonon scattering. This high ZT is ～ 50% higher than that of Ag-free sample and also higher than commercial p-type PbTe material. Further, the 50% substitution of toxic and heavy Pb by Sn is beneficial for the practical application and environmental sustainability of PbTe-based materials.