Aluminum phosphates coated sepiolite nanocomposite was fabricated via a simple one-pot heterogeneous precipitation strategy, and the effects of aluminum phosphates on the morphology of aluminum phosphates coated sepiolite were investigated. Moreover, the effect of aluminum phosphates coated sepiolite on the flame-retardant behavior, mechanical properties, and thermal stability of epoxy resin have been discussed. The results indicated that the introduction of only 20 wt% aluminum phosphates coated sepiolite in epoxy resin increased the limited oxygen index from 21.8% to 30.1%, thus the material met the UL-94 V-0 rating. Thermogravimetric analyses revealed that char yield increased in the presence of aluminum phosphates coated sepiolite form thermally stable carbonaceous char. Aluminum phosphates–coated sepiolite could improve the mechanical performance, thermal stability of epoxy resin.