High-density polyethylene (HDPE) is a commonly used material for cable sheathing, which is a flammable material. To ensure the safe transportation of electrical energy, it is necessary to enhance the flame-retardant properties of HDPE materials. In this work, ammonium polyphosphate (APP) with lignin (Lig) is used as an intumescent flame retardant, and the flame retardant properties of APP/Lig for HDPE with different ratios are analyzed. It is found that with 3/1 ratio of APP and Lig under 30 wt%, the best flame-retardant performance is achieved. To further improve its properties, chemical modification of Lig with hexachlorocyclotriphosphazene (HCCP) is conducted to introduce nitrogen and phosphorus, obtaining NP-Lig. Flame retardant, mechanical and electrical properties are tested for the prepared material. The flame retardant tests show that the LOI of HDPE is increased from 23.8 to 28.2 by the addition of APP/NP-Lig, compared to that of APP/Lig. Mechanical tests show that replacing Lig with NP-Lig slightly increases the tensile strength and elongation at break of HDPE. Electrical tests show that APP/NP-Lig flame retardant maintains the electrical properties of HDPE under the industry standards.