This study is dedicated to an in−depth analysis of the combustion characteristics of extruded polystyrene (XPS) as a building insulation material with the aim of accurately assessing its fire risk in the built environment. Innovatively, this research employed a cone calorimeter equipped with a self−designed insulating sample holder to conduct a systematic experimental study. Additionally, it performed a comprehensive analysis of the ignition characteristics, heat release rate, fire hazard, smoke release, and toxic gas emission of XPS materials. The experimental results revealed that the combustion behavior of XPS is influenced by multiple factors, including the content of flame retardants and external heat flux, which significantly affect the fire hazard of XPS. When the thermal radiation intensity escalates from 25 kW/m² to 55 kW/m², the peak heat release rate of XPS−B1 rises from 428 kW/m² to 535 kW/m², marking an increase of 25.00%. Conversely, the peak heat release rate of XPS−B2 surges from 348 kW/m² to 579 kW/m², reflecting a substantial increase of 66.38%. This research not only provides a solid theoretical foundation and detailed experimental data for the fire behavior of XPS materials but also holds significant practical importance for enhancing the fire safety of buildings. Overall, this research contributes to the scientific understanding of XPS insulation materials and supports the development of more effective fire prevention measures in construction.