On most dual fuel ships, the waste heat of engine exhaust gas and the cooling capacity of liquefied natural gas (LNG) in the fuel regasification process are not effectively used. In order to recover these redundant energy under the large temperature difference around 600 K, thermoelectric technology provides a feasible solution with the advantages of small size, no noise and high stability. In this article, a waste energy recovery system has been developed for LNG-diesel dual fuel ships using multistage thermoelectric generators (TEGs) scheme. According to the thermodynamic analysis and the materials selection, the recoverable energy, recovery form and thermoelectric materials used in the large temperature range of the dual fuel ship were determined. A multistage TEGs model considering the temperature distribution, fluid properties, connection methods and contact effects has been developed to predict the thermoelectric performance under the operating condition with large temperature difference. The results show that the maximum conversion efficiency can reach up to 18.54% with appropriate thermoelectric materials in different temperature zones and suitable multistage series-parallel schemes. Besides, the thermoelectric conversion effect makes the temperature distribution of the cold and hot fluids in the TEG quite different from that in the traditional heat exchangers. The output characteristics of TEGs are directly affected by the flow parameters of the cold and hot fluids and the connection methods of thermoelectric elements. This study provides a brand-new inspiration for developing the waste energy recovery and corresponding power conversion system on LNG-diesel dual fuel ships.