One-dimensional (1D) magnetic materials are intriguing due to their low densities and structural and chemical versatility. Herein a Dy(III) coordination polymer with significant single-molecule magnet behavior has been constructed with a strongly magnetic anisotropic Dy(III) motif and a luminescence-active bis(diphenylphosphinyl)hexane ligand. An energy barrier of 626 K and butterfly-like hysteresis loops below 9 K are unprecedented for lanthanide coordination polymers. Moreover, the frequency-dependent out-of-phase alternating-current susceptibility shows clear field dependence of the double-relaxation-time pattern, which exhibits an “isosbestic point” over the increasing applied magnetic field; however, it disappears in the sample diluted with diamagnetic Y(III), which strongly indicates that the magnetic dipole interaction is responsible for the presence of the “isosbestic point”. The photoluminescence spectra provide crucial information on the energy level that is consistent with the energy barrier and show semi-quantitative agreement with the result of ab initio calculations. The construction of this Dy(III) polymer provides a good example to explore the sensitive magnetic-field-response magnetization dynamics involving magnetic dipole interaction, by overcoming which the magnetic relaxation time can be tuned via an external magnetic field.