A method of encapsulating a thermoelectric device and its associated thermoelectric elements in an inert atmosphere and a thermoelectric device fabricated by such method are described. These thermoelectric devices may be intended for use under conditions which would otherwise promote oxidation of the thermoelectric elements. The capsule is formed by securing a suitably-sized thin-walled strip of oxidation-resistant metal to the ceramic substrates which support the thermoelectric elements. The thin-walled metal strip is positioned to enclose the edges of the thermoelectric device and is secured to the substrates using gap-filling materials. The strip, substrates and gap-filling materials cooperatively encapsulate the thermoelectric elements and exclude oxygen and water vapor from atmospheric air so that the elements may be maintained in an inert, non-oxidizing environment.