Bismuth–silica nanocomposites and polycrystalline bismuth were prepared via powder metallurgy in order to study the influence of silica inclusions on the thermoelectric properties of bismuth. Bi–SiO2 powders containing from 0.5 to 15 vol. % of silica and pure Bi powders were produced by an arc-plasma processing. Transmission electron microscopy investigations revealed the presence of a nanometric silica shell around the Bi grains. The powders were cold pressed and sintered close to the melting temperature of bismuth. The bulk microstructures are very different for the bismuth and the Bi–SiO2 nanocomposites because silica, which is primarily dispersed at grain boundaries, inhibits the grain growth during sintering. The electrical resistivity was measured from 5 to 300 K, while the thermoelectric power and the thermal conductivity were measured from 65 to 300 K on both polycrystalline bismuth and Bi–SiO2 samples containing 0.5, 4, and 15 vol. % of silica, respectively. The transport properties are mainly discussed with regard to the microstructures. In spite of a strong reduction of the thermal conductivity for the nanocomposites, the thermoelectric figure of merit is not improved compared to bismuth due to a dominating concurrent increase of the electrical resistivity resulting from a finite-size effect. © 2000 American Institute of Physics.