To develop the functional particles with better flame‐retardant and compatibility with epoxy resin (EP) matrix, organic–inorganic double‐shell microencapsulated aluminum hypophosphite (MSiAHP) was prepared by situ polymerization. The water contact angles of MSiAHP (62.4°) is significantly larger than that of aluminum hypophosphite (34.4°), which shows that the organic shell material of MSiAHP endows excellent hydrophobicity and water resistance. With the incorporation of MSiAHP, EP/30%MSiAHP composite exhibits limiting oxygen index value of 27.3% and V‐0 rating. Furthermore, the cone calorimetry test reveals that MSiAHP reduces the peak heat release rate, total heat release and total smoke release of EP matrix by 33.3%, 24.4% and 56.6%, respectively. Besides, due to the unique organic–inorganic double‐shell structure of MSiAHP particles, EP/30%MSiAHP composite achieves greater thermal stability and higher char yields than pure EP. The investigation of the products in the gas and condensed phase demonstrates that MSiAHP is beneficial to the generation of a high‐density and compact carbon layer structure with a high graphitization degree, and delay the generation time of pyrolysis products in the gas phase, which can improve the fire safety of EP composites effectively. Furthermore, preeminent dispersion and compatibility of MSiAHP lead to EP/MSiAHP composites with excellent mechanical properties.