Rigid polyurethane foam (RPUF) has received extensive attention as an energy-saving building material. However, it is still a great challenge to easily fabricate multifunctional RPUFs that combine excellent mechanical properties, flame retardancy, and thermal insulation. Herein, ammonium polyphosphate was chemically modified with 2-aminobenzimidazole (APP@Abz) through an ion exchange reaction. It has been found that APP@Abz is well-dispersed in RPUF matrix. FR-RPUF3 containing 10.0 wt% of APP@Abz shows excellent thermal insulation performance with a 5% increase in thermal conductivity compared to virgin RPUF. In addition, FR-RPUF3 exhibits ultrahigh flame retardancy and smoke suppression (total heat release, total smoke production, and smoke factor decreased by 50.61%, 61.90%, and 64.70%, respectively) in comparison to virgin RPUF. More importantly, FR-RPUF3 exhibits improved mechanical properties and hydrophobicity compared to virgin RPUF. This study is of great importance for the development and application of building insulation materials.