Abstract The uniform dispersion of carbon nanotubes (CNTs) was achieved in the styrene–ethylene–butylene–styrene (SEBS) coated by liquid bisphenol A bis(diphenyl phosphate) (BDP), a halogen-free flame retardant. It was found that most of CNTs existed in a filamentous stretched state. Compared with pure SEBS, the tensile strength and elastic modulus of the SEBS/3 wt.% CNTs composite with 5 wt.% BDP (SEBS-3), were increased by 114% and 225%, respectively. The temperature of 50% weight loss under air condition increased from 351 °C of pure SEBS to 437 °C of the SEBS-3. Meanwhile, the limited oxygen index value and UL-94 tests of the SEBS-3 reached 25.5% and V-0, respectively. More importantly, this method endowed the SEBS/BDP/CNT composites with the good mechanical and flame-retardant properties, broadening their scope of application, reducing their cost.