To suppress space charge accumulation and improve direct current (DC) electrical properties of insulation materials, crosslinked polyethylene modified with 2-(4-benzoyl-3-hydroxyphenoxy) ethyl acrylate (XLPE/BHEA) containing polar functional groups was prepared by melt blending. The gel content, thermal elongation, tensile strength, elongation at break, elasticity modulus, differential scanning calorimetry (DSC) and X-ray photoelectron spectra (XPS) measurement results demonstrated that the BHEA could slightly enhance the crosslinking of polyethylene (PE) and affect the mechanical properties and crystallization of XLPE, and the BHEA molecule was not easy to precipitate from XLPE after the crosslinking process. XLPE modified with 3.0 phr (parts per hundreds by weight) BHEA could effectively suppress space charge accumulation, reduce DC conduction and improve DC breakdown strength of XLPE at a higher temperature. Deeper traps were introduced in XLPE/BHEA composites due to the polar functional groups in BHEA, which could raise the potential charge injection barrier and reduce the charge carrier number and mobility to suppress space charge accumulation and reduce the conduction current density.