Improved thermoelectric properties of Aluminum Zinc Oxide (AZO) thin films deposited by radio frequency (RF) and pulsed Direct Current (DC) magnetron sputtering at room temperature are reported. In both techniques films were deposited using sintered and non-sintered targets produced from nano-powders. It is confirmed that both the Al doping concentration and film thickness control the thermoelectric, optical and structural properties of these films. Seebeck coefficients up to -134 mu V K-1 and electrical conductivities up to 4 x 10(4) (Omega m)(-1) lead to power factors up to 4 x 10(-4) W mK(-2), which is above the state-of-the-art for similar materials, almost by a factor of three. The thermoelectric I-V response of an optimized AZO element with a planar geometry was measured and a maximum power output of 2.3 nW, for a temperature gradient of 20 K near room temperature, was obtained. Moreover, the low thermal conductivity (< 1.19 W mK(-1)) yields a ZT value above 0.1. This is an important result as it is at least three times higher than the ZT found in the literature for AZO, at room temperature, opening new doors for applications of this inexpensive, abundant and environmental friendly material, in a new era of thermoelectric devices.