Understanding the microscopic processes affecting the bulk thermal conductivity is crucial to develop more efficient thermoelectric materials. PbTe is currently one of the leading thermoelectric materials, largely thanks to its low thermal conductivity. However, the origin of this low thermal conductivity in a simple rocksalt structure has so far been elusive. Using a combination of inelastic neutron scattering measurements and first-principles computations of the phonons, we identify a strong anharmonic coupling between the ferroelectric transverse optic mode and the longitudinal acoustic modes in PbTe. This interaction extends over a large portion of reciprocal space, and directly affects the heat-carrying longitudinal acoustic phonons. The longitudinal acoustic-transverse optic anharmonic coupling is likely to play a central role in explaining the low thermal conductivity of PbTe. The present results provide a microscopic picture of why many good thermoelectric materials are found near a lattice instability of the ferroelectric type.