Chemical incompatibility and low thermal conductivity issues of molten-salt-based thermal energy storage materials can be addressed by using microstructured composites. Using a eutectic mixture of lithium and sodium carbonates as molten salt, magnesium oxide as supporting material, and graphite as thermal conductivity enhancer, the microstructural development, chemical compatibility, thermal stability, thermal conductivity, and thermal energy storage performance of composite materials are investigated. The ceramic supporting material is essential for preventing salt leakage and hence provides a solution to the chemical incompatibility issue. The use of graphite gives a significant enhancement on the thermal conductivity of the composite. Analyses suggest that the experimentally observed microstructural development of the composite is associated with the wettability of the salt on the ceramic substrate and that on the thermal conduction enhancer.