In order to widen the application of iron oxide yellow pigments (α‐FeOOH) in high temperature industry, α‐FeOOH coated with calcium phosphate (α‐FeOOH/Ca) were modified with stearic acid (Sa) through dry process. Scanning electron microscope (SEM), transmission electron microscope (TEM), X‐ray diffraction (XRD), Fourier transform infrared spectroscopy (FT‐IR), X‐ray photoelectron spectroscopy (XPS), and thermogravimetry (TG) were employed to characterize the effect of surface modification. The effects of Sa dosage on the thermal resistance of α‐FeOOH/Ca after modification were also discussed. The crystal structure of α‐FeOOH/Ca does not change after modification with Sa, but the ratio of length to diameter about α‐FeOOH/Ca is smaller. Sa can react with α‐FeOOH/Ca in the form of –COOCa and HPO42− based on FT‐IR and XPS analyses. TG‐DTG results suggest that calcium phosphate and Sa improve the thermal stability of α‐FeOOH. The value of color difference of modified α‐FeOOH/Ca first decrease and then increase with increasing of Sa dosage, which is studied by CIE ΔL, Δa, and Δb colorimetric analyses. The amount of Sa affects the thermal resistance and dispersion performance of α‐FeOOH/Ca simultaneously; also the relationship between thermal resistance and dispersion is inversely proportional. Experimental characterizations reveal that introduction of the phosphates and Sa not only prevents the loss of water on the surface of α‐FeOOH but improve its activation index and dispersibility in organic solvents.