High-strength cementitious composites are highly susceptible to explosive spalling at elevated temperatures, necessitating innovative fire resilience strategies. This study investigates the dual role of expanded polystyrene (EPS) beads as both lightweight aggregate and spalling mitigator in mortars subjected to short-term, rapid thermal exposure. High-strength mortar (HSM) and EPS-modified mortar were exposed to temperatures up to 600 °C with brief dwell times (10–30 min), followed by furnace or water cooling. Residual properties and microstructural evolution were systematically evaluated. Results revealed a fundamental temperature-dependent shift in EPS performance. At 400 °C, EPS incorporation prevented explosive spalling across all cooling regimes by generating porosity that dissipated internal vapor pressure, while plain HSM suffered severe spalling. Both mixtures showed strength gains at 200 °C due to thermal activation, though EPS mortar exhibited attenuated improvements. At 400 °C, EPS mortar experienced progressive strength loss attributed to bead decomposition and resulting porosity increases. EPS-enhanced thermal insulation was confirmed through significantly reduced core temperatures. However, under extreme conditions (600 °C), EPS decomposition triggered catastrophic spalling. Microstructural analysis showed EPS-induced voids transitioned from beneficial pores to critical defects with increasing temperature, while elemental analysis confirmed degradation was primarily physical rather than chemical. These findings demonstrate EPS’s viability for spalling mitigation in moderate fire scenarios, though its application requires careful temperature management. The study underscores the importance of evaluating fire mitigation materials under realistic transient heating conditions.