In order to eliminate the negative effect of traditional 9,10‐dihydro‐9‐oxa‐10‐phosphaphenanthrene‐10‐oxide (DOPO) ‐based flame retardants on heat resistance, mechanical properties, and curing process of epoxy resin (EP), a DOPO derivative (DST) constructed by sulfaguanidine and thiophene is designed and used as co‐cured agent for EP. Compared with EP, the maximum decrease of glass transition temperature (Tg) in all EP/DST samples is less than 5%, indicating EP modified by DST maintains good heat resistance. Encouragingly, DST shows satisfactory flame‐retardant efficiency and excellent smoke suppressing effects. EP containing barely 5 wt% of DST (P content: 0.37 wt%) achieves a UL‐94 V‐0 rating and 32.8% limited oxygen index (LOI) value. Its peak heat release rate (PHRR), total heat release (THR), and total smoke production (TSP) are also decreased by 31.2%, 18.8%, and 30.2% . Further, DST significantly improves mechanical properties of the EP/DDM/DST system. The tensile strength and modulus increase by 37.2% and 14.6%, respectively, as DST content is 7.5 wt%. It is revealed that DST has positive quenching and diluting effects in the gas phase, as well as promoting the formation of a compact char layer in the condensed phase.