The partially sulfonated polystyrene (SPS) is a very simple and easily prepared material. In this work, SPS was used for the first time as a macromolecular compatibilizer to improve the compatibilization of high-impact polystyrene (HIPS)/magnesium hydroxide (MH) composites by self-compatibilization technology. The compatibilization effects of SPS were systematically studied by mechanical performance tests, limiting oxygen index (LOI) measurements, thermal stability analyses, and scanning electron microscopy (SEM) observation. On the basis of these experimental results, SPS was proven efficient to enhance the compatibilization of the HIPS/MH composites due to the coupling effects. The sulfonic groups of SPS could anchor onto the surface of MH particles through interaction with hydroxyl groups of M-I. Meanwhile, the long alkyl chains of SPS readily entwisted with HIPS matrix. Besides, the effects of both the sulfonation degree and the content of SPS on the performance of HIPS/MH composites were investigated also. In order to obtain the best overall final performance, both of the aforementioned parameters should be controlled in a suitable range. The optimal condition in this study was 3-4.5 wt % of SPS with sulfonation degree of 24.8-35.5% in the composites. Furthermore, compared with styrene-butadiene-styrene block copolymer (SBS), a commercial compatibilizer widely used in HIPS materials, SPS exhibited better compatibilization effects but lower cost. Therefore, it could be concluded that SPS was applicable as a cost-effective compatibilizer in HIPS/MH composites.