Water-tree resistances of styrene block copolymer/polypropylene (SEBS/PP) composites are investigated by characterizing crystallization structures in correlation with the dynamic mechanical properties to elucidate the micro-structure mechanism of improving insulation performances, in which the accelerated aging experiments of water trees are performed with water-knife electrodes. The water-tree morphology in spherulites, melt-crystallization characteristics and lamella structures of the composite materials are observed and analyzed by polarizing microscopy (PLM), differential scanning calorimetry (DSC) and scanning electron microscopy (SEM), respectively. Dynamic relaxation and stress-strain characteristics are specifically studied by means of a dynamic thermomechanical analyzer (DMA) and electronic tension machine, respectively. No water-tree aging occurs in both the highly crystalline PP and the noncrystalline SEBS elastomer, while the water trees arising in SEBS/PP composites still has a significantly lower size than that in low-density polyethylene (LDPE). Compared with LDPE, the PP matrix of the SEBS/PP composite represent a higher crystallinity with a larger crystallization size in consistence with its higher mechanical strength and lower dynamic relaxation loss. SEBS molecules agglomerate as a “island” phase, and PP molecules crystallize into thin and short lamellae in composites, leading to the blurred spherulite boundary and the appreciable slips between lamellae under external force. The high crystallinity of the PP matrix and the strong resistance to slips between lamellae in the SEBS/PP composite essentially account for the remarkable inhibition on water-tree growth.