Composites based on polyethylene terephthalate (PET) and surface-modified carbon microspheres (CMSs) were prepared by melt mixing. The surface modification of CMSs was conducted with low-temperature plasma technology first, and a phosphorus-nitrogen flame retardant, guanidine phosphate (GDP), was then grafted onto CMSs. The modification of CMSs was done to improve both the filler dispersity in the PET matrix and the flame-retardant performance of composites. The obtained CMSs-GDP was characterized by FTIR spectra and a scanning electron microscope (SEM). The grafting ratio was characterized and calculated by thermal gravimetric analysis (TGA). The grain size analysis was used to describe the dispersity of CMSs. The mechanical properties of the PET/CMSs-GDP composite were measured using a universal testing machine. The PET/CMSs-GDP composite can achieve a limiting oxygen index (LOI) value of 32.4% and a vertical burning test (UL94) V-0 rating at 3% CMSs-GDP loading.