Polypropylene (PP) has a wide range of applications in daily life but it is highly flammable. Intumescent flame retardants (IFRs) are used to improve the flame-retardant performance of polypropylene. However, the poor compatibility between IFRs and PP poses significant challenges. In this study, an IFR was reacted with γ-aminopropyl triethoxysilane (KH550) to introduce necessary reactive sites on the surface of the IFR. Subsequently, maleic anhydride-grafted SBS (SBS-g-MAH) was reacted with KH550 to further coat the IFR, resulting in a modified IFR named MA-IFR. The effects of MA-IFR on the flame retardancy, mechanical properties, and water resistance of PP composites were systematically investigated. The limiting oxygen index of the PP/MA-IFR composite reached up to 39.7%, with the vertical burning test (UL-94) achieving a V-0 rating. Moreover, compared to the control PP, the peak heat release rate and peak smoke release rate were reduced by 85.0% and 82.5%, respectively. In addition, the mechanical properties of the PP composites were significantly improved, with tensile strength and impact strength increasing by 29% and 18%, respectively, compared to those of the PP/IFR composite. Notably, the PP/MA-IFR composite maintained excellent flame retardancy, even after being immersed in water at 70 °C for 168 h. These results demonstrate that MA-IFR offers a promising solution for producing flame-retardant and water-resistant PP composites.