A block copolymer named PMAiBuPOSS-b-PHEPO was synthesized via reversible addition-fragmentation transfer polymerization (RAFT) and blended by using methacrylolsobutyl polyhedral oligomeric silsesquioxane (MAiBuPOSS) and 9,10-dihydro-9-oxa-10-phosphaphenanthrene 10-oxide ethyl methacrylate(HEPO) as monomers. This polymer was adopted to modify bisphenol A-based epoxy resin. Scanning electron microscope (SEM) characterization of the fracture surface of the composites indicates that PMAiBuPOSS-b-PHEPO could self-assemble in the epoxy resin to form a structure with POSS enriched core and PHEPO enriched shell. The thermal, mechanical and flame-retardant properties of the composites were characterized by dynamic mechanical analysis (DMA), thermogravimetric analysis (TGA), differential scanning calorimetry (DSC), vertical combustion test (UL-94) and limiting oxygen index measurement (LOI). It is found that PHEPO could improve the compatibility between PMAiBuPOSS-b-PHEPO and epoxy resin, therefore evidently improving the thermal stability and flame-retardance of the composite materials. With a mass fraction 5% of PMAiBuPOSS-b-PHEPO, the as formed composite materials possess a LOI value of 33.0%, reach UL-94 V-0 rating, as well as exhibit an enhanced mechanical strength.