A certain amount of ferroaluminate cement (FAC) was substituted for MgO during the magnesium phosphate cement (MPC) preparation to obtain the MPC–FAC composite cement. The influence of FAC on the strength, water resistance, pH, and setting time of MPC–FAC composite cement were examined. The microstructure and chemical composition were also analyzed by adopting scanning electron microscopic energy-dispersive spectrometer and X-ray diffraction, respectively. The study showed that setting time of MPC–FAC composite cement was dramatically prolonged when FAC substitution for MgO was between 30 and 40 wt %. The strength of MPC–FAC did not decrease during the early curing time (1 h and 1 d), whereas it increased during the late curing time (3, 7, and 28 days). Moreover, the existence of FAC decreased the hydrated product K-struvite during the early curing time and thus dramatically enhanced the water-resistance of MPC–FAC. With the addition of FAC, a large number of cementitious materials of AFt and AFm, as well as flocculent colloidal substances of AH3, C–S–H, and FH3, were generated during the hydration of MPC, which were filled in the internal pore of the hydrate. Thus, the internal compactness of the sample increased, while the compact protective covering layer was generated on the surface to enhance the water resistance and strength in the late curing time.