The surface of EPS is of hydrophobic nature, which can not wet binding material. As in the freshly mixed mortar, EPS particle is not affined with cement paste and has a low bulk density, which will be apt to make EPS particle buoy, and lead to the segregation of mortar, the decrease of water retentivity and affect its workability. When pretreated, the surface of EPS can be changed into that of hydrophilic nature, and be wetted by freshly mixed silicate paste. The technology channel of EPS surface modification is that select proper high-molecular binder and coupling agent, prepare polymer silicate binding material of low water-cement ratio, and utilize the double effect of binder and coupling agent to form silicate grout of hydrophilic nature on the surface of EPS, by composite binding material wrapping the surface of EPS. A new thermal insulating mortar with good properties of thermal engineering, weather-resisting and crack-resisting can be made by modified EPS as light aggregate and cement as binder, modification with fiber and polymer. This new type of insulating mortar can be used as outer thermal insulation of outside wall, which breaks the limitation of traditional insulating mortar only as interior insulation. It has been widely used in the building energy-saving model project.