Ammonium polyphosphate (APP) is not an efficient flame retardant for polypropylene (PP) when it is used alone. In order to improve its flame-retardant efficiency, ethanolamine (ETA) was used to chemically modify APP via ion exchange reaction. The resulting ethanolamine-modified ammonium polyphosphate (ETA-APP) was alone applied to flame retard PP, the limiting oxygen index (LOI) value could reach 35.0% and the vertical burning test (UL-94) could pass the V-0 rating at a loading of 35 wt% ETA-APP. Moreover, cone calorimeter (CC) test results showed that the heat release rate (HRR), the total heat release (THR), the mass loss rate (MLR), the smoke production rate (SPR) and the total smoke production (TSP) of PP/35 wt% ETA-APP composite largely decreased, for example, by 77.2%, 88.5% and 77.9% for THR, TSP and the fire growth rate (FGR), respectively, compared with PP containing an equal amount of APP. In addition, the residual char of PP/35 wt% ETA-APP increased by 195.6% compared with that of PP/35 wt% APP. Fourier transform infrared spectroscopy (FTIR) and X-ray photoelectron spectroscopy (XPS) were used to analyze the flame retardant mechanism of ETA-APP. It was confirmed that the formation of P–O–C and P–N–C structures, resulting from the incorporation of ETA could greatly improve the stability of intumescent char layer and consequently lead to the much better flame retardancy of ETA-APP than that of unmodified APP. Experimental results demonstrated that the prepared ETA-APP acted not only as the acid source and blowing source as efficient as unmodified APP, but also as an excellent charring agent beyond the unmodified APP.