Phosphorous-based fire-retardant materials are considered eco-friendly and can be reinforced in polymers or functionalized on the polymer backbone to reduce combustibility. Herein, sepiolite fiber (Spl) was first primed with polydopamine (PDA), and the amine group density was increased by Michael's addition of EDA to further graft H3PO3. The stepwise modifications and formation of the phosphorylated Spl-PDA-P and Spl-PDA-EDA-P were established by analyzing surface chemical structure, surface and internal morphology, and surface area. Further, the Spl-based fillers were reinforced in the PP matrix, and the nanocomposites were systematically characterized for thermal stability, mechanical property, flow behavior, and fire-retardant properties. The PP_Spl-PDA-EDA-P nanocomposite at 5% filler loading has a tensile and flexural strength of 36.3 MPa and 50.6 MPa, respectively. The flow property was established by determining melt flow index (MFI) of 13.3 ± 0.75 g/10 min and melt rheological properties. After phosphorylation, the Spl-based fillers have shown shear thinning behavior with increased filler loading. Finally, the prepared nanocomposites were evaluated for fire retardant properties by determining the limiting oxygen index (LOI) and UL-94 vertical burning test. The neat PP has an LOI of 17.5, and a maximum improvement was observed in the case of PP_Spl-PDA-EDA-P with an LOI of 30.2. Overall, the grafting of H3PO3 on PDA coated Spl has created a robust filler to impart fire-retardant property in combustible PP.