One of the key challenges in the field of polymer engineering is the development of lightweight materials with improved flame retardant properties. Expanded polypropylene (EPP) is a low density material (typically 20-200 kg/m3) with excellent thermal insulating properties, very good energy absorption properties and complex 3D geometries. Therefore, this class of materials is used in many industrial applications, e.g. automotive, packaging, furniture etc. However, in order to increase the application scope of EPP, added functionalities are in a great demand. Since the modification of the polymer foam matrix is a challenge regarding the bulk properties and the foamability of the polymer composites, there is a need for universal functionalization methods. Flame retardant coatings on foamed beads provide a versatile and elegant route towards achieving this aim: the composition of the coatings can be adjusted on demand, which is more flexible than polymer matrix modification, while the bulk properties of the bead are not influenced. Motivated by these benefits, we present a novel approach for the engineering of multifunctional EPP foams. Applying a tailored surface pre-modification and subsequent steam-chest moulding, functional components were included within bead interfaces. Depending on the coating, it was possible to produce EPP foams with improved flammability (smoke and heat release) and self-extinguishing behavior. Further, since a good fusion of beads is necessary in order to achieve favorable mechanical properties, we discuss the effect of incorporated functional components on the bead fusion in the resulting foams. It was found that both, the nature and the size of additives strongly affect the welding quality due to different interdiffusion stages. These findings provide a deeper knowledge about the influence of heterogeneous interbead layer on EPP properties and allow further development of novel materials with fine-tuned functional properties.