The synergistic flame-retardant and smoke suppression properties of ammonium polyphosphate (APP) and activated carbon-supported Fe2O3 (AC-Fe2O3) on flame-retardant epoxy resin (EP) composites were studied. The fire behavior and smoke emission of EP composites were evaluated by limiting oxygen index (LOI), scanning electron microscopy, UL-94 vertical burning, and cone calorimeter test. LOI and UL-94 tests showed that the addition of appropriate amount of AC-Fe2O3 can effectively reduce the fly ash phenomenon, the dripping, and after-flame time. The thermogravimetric analysis and derivative thermogravimetry results showed that APP and AC-Fe2O3 can effectively decrease the maximum decomposition rate (Rmax) and promote the carbonization reaction of EP. As for the cone calorimeter test results, APP and AC-Fe2O3 clearly changed the decomposition behavior of EP, leading to the formation of a stable char layer on the surface of the composites. When flame-retardant loading was 4 mass%, the peak heat release rate and peak smoke production rate of the 3APP/1AC-Fe2O3/EP sample decreased 50.2% and 46.9%, respectively. The amount of char residual after test increased from 8.47 to 21.25%. In addition, it was observed from the macroscopic photographs of the char residue after the cone test that, at the optimum proportion, APP and AC-Fe2O3 could promote the formation of compact charred layers and prevent their cracking, which effectively protected the underlying materials from burning.