AbstractA novel microcapsule flame retardant microencapsulated aluminum hypophosphite (MAHP) was introduced. Fourier transform infrared spectroscopy, scanning electron microscopy, and x‐ray photoelectron spectroscopy were used to characterize the shell material on the surface of MAHP. The water contact angle (WCA) experiments show that the WCA of MAHP (71.4°) is significantly larger than that of aluminum hypophosphite (34.4°). And the interfacial free energy between MAHP and epoxy resin (EP) is only 7.89 mJ/m2, which results in good compatibility with EP. The results from differential scanning calorimeter test indicate that the addition of MAHP can improve the heat resistance of EP matrix. Thermogravimetric (TG) tests show that EP/MAHP has the largest amount of residue (32.03 wt%). The combustion behaviors of flame‐retardant EP (FR‐EP) composites were evaluated by limiting oxygen index, UL‐94, and cone calorimetry. The results show that the microencapsulation to AHP in this study can significantly improve the flame retardancy of EP. Thermogravimetric infrared analysis was used to investigate the gas‐phase products. Surface morphology and structure of char residues of EP and FR‐EP was also studied. The carbon layer became quite dense and continuous when MAHP was added. On the premise of improving the flame retardancy, the mechanical properties of the material are retained. The tensile strength and bending strength of EP/MAHP‐3 were 23.98 and 50.75 MPa, respectively.