Half-Heusler compounds have been in focus as potential materials for thermoelectric energy conversion in the mid-temperature range, e.g., as in automotive or industrial waste heat recovery, for more than ten years now. Because of their mechanical and thermal stability, these compounds are advantageous for common thermoelectric materials such as Bi 2 Te 3 , SiGe, clathrates or filled skutterudites. A further advantage lies in the tunability of Heusler compounds, allowing one to avoid expensive and toxic elements. Half-Heusler compounds usually exhibit a high electrical conductivity σ , resulting in high power factors. The main drawback of half-Heusler compounds is their high lattice thermal conductivity. Here, we present a detailed study of the phase separation in an n-type Heusler materials system, showing that the Ti x Zr y Hf z NiSn system is not a solid solution. We also show that this phase separation is key to the thermoelectric high efficiency of n-type Heusler materials. These results strongly underline the importance of phase separation as a powerful tool for designing highly efficient materials for thermoelectric applications that fulfill the industrial demands of a thermoelectric converter.