A phosphorus-containing compound, (oxybis(4,1-phenylene))bis(phenylphosphine oxide) (ODDPO), was successfully synthesized and used as a flame retardant for epoxy resin (EP). The results demonstrated that EP/ODDPO, containing 1.2 wt% phosphorus, achieved a vertical burning V-0 rating, with a limited oxygen index value of 29.2%, indicating excellent flame retardancy. Comprehensive evaluations revealed that ODDPO exhibited both gas-phase and condensed-phase flame-retardant effects on EP, with a particularly notable barrier effect. In addition, the incorporation of ODDPO had a minimal negative impact on the glass transition temperature (Tg) and thermal stability of the EP matrix. Compared to unmodified EP (EP-0), the Tg value and initial decomposition temperature of EP/ODDPO-1.2 decreased by only 7.6 °C and 10.0 °C, respectively. Moreover, the introduction of ODDPO significantly improved the hydrophobicity and water absorption resistance of epoxy materials, which is attributed to ODDPO's rigidity and symmetric structure, reducing water molecule permeation. Furthermore, the dielectric properties of ODDPO-modified EP samples were strengthened compared to EP-0, due to the ODDPO's symmetric structure reducing the polarity of the matrix. The above results indicated that ODDPO serves as an excellent flame retardant while enhancing other properties of the EP matrix, thereby contributing to the preparation and application of high-performance epoxy materials.