The thermoelectric generator (TEG) can recover a fraction of exhaust energy loss from the automotive exhaust gas. However, its application is limited due to the pumping losses and turbocharger efficiency drop when the engine system is equipped with the TEG. This research aims to optimize the thermal efficiency of a compressed natural gas engine (CNG) system with the TEG mounted after a turbocharger via numerical modeling. The total engine model with the integrated thermoelectric module (TEM) and heat exchanger is developed in a commercial simulation tool. Measured data from the corrugated fin type heat exchanger TEG experiments under different fin pitches, gas temperatures, and mass flow rates are used for validating the TEG model. The TEG's heat exchanger modeling considers pressure differences at inlet and outlet, heat transfer coefficients from gas to wall, exchanger wall temperature, and the module heat flux. The model can predict the module's pressure loss and heat transfer characteristics. Next, the TEG model is integrated into a production type 3.0 L CNG engine model operated under spark ignition mode. The engine model was well calibrated with various measured data taken from a turbocharged, mass-production engine used in light-duty delivery CNG trucks. The effectiveness of the integrated engine and TEG model is demonstrated by focusing on engine brake thermal efficiency enhancement using waste heat recovery via thermoelectric generation. Finally, the engine system's thermal efficiency could be improved by up to 0.8 % without significant brake power loss.