In this paper, the defect formation energies, the nature of chemical bonding, and electronic structures of Mn- and Mg-doped SnTe alloys were determined by first-principles calculations. The effects of substitutional atoms on thermoelectric parameters are analyzed by solving the Boltzmann equation. The solution solubility of Mg in SnTe alloy is higher than that of Mn, and the lattice distortion caused by Mn substituting Sn sites is more severe. In addition, the resonant level of Sn1-xMnxTe alloys possesses a flat trend of the valance band maximum, which improves the effective carrier mass and Seebeck coefficient. The Mg-doped alloys exhibit higher carrier mobility and electrical conductivity. The maximum value of the power factor is 5.78 mWm−1K−2 for the Sn0.97Mn0.03Te alloy. Corresponding directionally-solidified samples with the same composition were also prepared. The Sn0.97Mn0.03Te sample also achieves the highest ZT value of 1.28. These results provide theoretical reference for optimizing the thermoelectric performance of SnTe alloys by substituting atoms.