A novel poly(hydroxy-p-phenylenebenzobisoxazole) (HPBO) with superior comprehensive properties was synthesized via self-polymerization of composite salt monomer (HD). The molecular simulation results of relative total energies and the activation energies indicated that the meta-carboxyl group was the active site of condensation reaction which was carried out by amidation. Further molecular simulation results showed that the most probable configuration of HPBO was ordered P1 conformation, and the conjugation and stability of HPBO were enhanced by increasing the number of repeat units. The introduction of mono-hydroxyl group contributes to the formation of intramolecular hydrogen bonds of HPBO molecules, which made HPBO exhibit the molecular structure of the two-dimensional conjugate & coplanar and improved the thermal stability relative to PBO and DHPBO. The simulation results were verified by corresponding experimental investigation.