10-(2,5-Dihydroxyphenyl)-10-hydro-9-oxa-10-phosphaphenanthrene-10-sulfide (DOPS-HQ) was synthesized from 9,10-dihydro-9-oxa-10-phosphophene-10-sulfide(DOPS) and p-benzoquinone and used to modify epoxy resin (EP). The structure was determined by fourier transform infrared spectroscopy(FTIR), NMR and high resolution mass spectrometry(HR MS). The effects of DOPS-HQ on the thermal stability, thermal degradation behaviour and flame retardancy of EP were further investigated by thermogravimetric analysis (TG), vertical flame test (UL-94), limit oxygen index (LOI) test, cone calorimeter test(CONE) and thermogravimetric- infrared spectroscopy analysis (TG-IR). The results showed that the flame retardant DOPS-HQ can promote the thermal stability and char formation, improve the flame retardancy and decrease its peak heat release rate (PHRR) and total heat release (THR). At flame-retardant content of 15wt%, LOI value of DOPS-HQ/EP increased to 32.5%, the vertical combustion grade reached UL-94 V-0, and its PHRR and THR decreased by 32.7% and 38.2% respectively. The result of TG-IR showed that DOPS-HQ/EP will generate phosphorus-containing radicals (PO·, HPO2·, PO2·) during thermal degradation as H·, O· or HO· radical scavengers, so DOPS-HQ plays a flame retardant role in gas phase.