Mistakes in AI systems are inevitable, arising from both technical limitations and sociotechnical gaps. While black-boxing AI systems can make the user experience seamless, hiding the seams risks disempowering users to mitigate fallouts from AI mistakes. While Explainable AI (XAI) has predominantly tackled algorithmic opaqueness, we propose that seamful design can foster Humancentered XAI by strategically revealing sociotechnical and infrastructural mismatches. We introduce the notion of Seamful XAI by (1) conceptually transferring "seams" to the AI context and (2) developing a design process that helps stakeholders design with seams, thereby augmenting explainability and user agency. We explore this process with 43 AI practitioners and users, using a scenario-based co-design activity informed by real-world use cases. We share empirical insights, implications, and critical reflections on how this process can help practitioners anticipate and craft seams in AI, how seamfulness can improve explainability, empower end-users, and facilitate Responsible AI.