High-performance and multifunctional epoxy resins are in increasing demand in the booming electrical and electronic fields; however, the complexity and high cost of the process pose a huge challenge for its manufacture. Herein, two multifunctional phosphorus–silicone flame retardants (DTEP and DDEDP) were synthesized by grafting rigid phosphaphenanthrene structure into a soft cyclic silicone epoxy resin, where the whole process is solvent-free, cost-effective, and a 100% atomic economy. The cured products containing 5 wt % DTEP and DDEDP (i.e., DTEP-5 and DDEDP-5) both can easily achieve a V-0 rating in the UL-94 test and their limiting oxygen index values are 28.8% and 29.1%, respectively. Compared to pure epoxy resin, the heat and smoke emissions of the optimal DTEP-5 sample were reduced by 30.8% and 31.5% during the combustion, and the toughness (impact strength) of DTEP-5 was increased by 3.3 times without sacrificing their rigidity. Additionally, due to the superior electrical insulation capabilities and low surface energy of silicone, DTEP and DDEDP impart epoxy resin with excellent dielectric and hydrophobic properties. This paper offers a facile and industrially feasible strategy for manufacturing multifunctional epoxy resin and exhibits great promise in electrical and electronic fields.