Carbon fiber-reinforced resorcinol-formaldehyde (C-RF) composites were modified with different weight ratios of zirconium diboride (ZrB2) to realize ZrB2-C-RF composites. Mechanical properties, thermal stability, and ablation resistance of ZrB2-C-RF composites were found to be optimum when the ZrB2-to-RF weight ratio is 0.05:1. Thermogravimetric analysis has shown that with optimum ZrB2 content, pyrolysis residue of resorcinol-formaldehyde got enhanced by 36%, indicating enhanced thermal stability of the system. Ablation mechanisms of composites after oxyacetylene flame exposure were derived from the inferences obtained from X-ray diffraction and microstructure analysis. It was found that the formation of high-temperature species, such as ZrO2 and ZrC, due to decomposition of ZrB2 and subsequent reaction products with char resulted in increased ablation resistance of the composites. During ablation, ZrB2-C-RF composites displayed low char formation and low erosive losses, confirming that these composites are promising for rocket motor nozzle and heat shielding/thermal protection system applications.