Flame-retardant properties of ammonium polyphosphate (APP) and its two microcapsules, APP with a shell of melamine–formaldehyde (MF) resin (MFAPP) and APP with a shell of epoxy resin (EPAPP), were studied in styrene–butadiene–styrene (SBS). The results indicate that APP after the microencapsulation leads to an increase in limiting oxygen index in SBS compared with APP. When dipentaerythritol is incorporated into the SBS composites containing the APP microcapsules, a further improvement in flame retardancy of the composites is observed. The microencapsulation does not result in much improvement of mechanical properties. Moreover, the effect of a compatibilizer (SBS grafted with maleic anhydride) on flame-retardant and mechanical properties of SBS/APP composites was investigated.