Using density functional theory, we have systematically explored the 1a and 1b vacancy filling in NbO (space group Pm-3m) with Nb and N, respectively, to design compounds with large Seebeck coefficients. The most dominating effect was identified for filling of 1b Wyckoff sites with N giving rise to a fivefold increase in the Seebeck coefficient. This may be understood based on the electronic structure. Nb d-nonmetal p hybridization induces quantum confinement and hence enables the enhancement of the Seebeck coefficient. This was validated by measuring the Seebeck coefficient of reactively sputtered thin films. At 800 °C these electrically conductive oxynitrides exhibit the Seebeck coefficient of -70 µV K(-1), which is the largest absolute value ever reported for these compounds.