Increasing the hydrophobicity of ammonium nitrate is of great significance for its application as commercial explosives. In this article, a surface functionalized ammonium nitrate with enhanced water-resistance property was demonstrated using a new hydrophobic coating agent. Structural properties and thermal stability of the prepared samples were investigated by powder X-ray diffraction, scanning electron microscopy and differential scanning calorimetric analysis. Fourier-transform infrared spectroscopic results show that a uniform hydrophobic layer is successfully coated on the surface of ammonium nitrate prills. Surface coated ammonium nitrate shows excellent stability in aqueous environment with effective detonation property compared to commonly used ammonium nitrate fuel oil (ANFO) explosives. Thus, our surface modified ammonium nitrate could serve as a potential explosive for watery hole blasting operations.