In this work, a new flame retardant additive [2-phenyl-1,3,2 oxazaphospholidine 2-oxide (POPO)] containing phosphorus and nitrogen is synthesized using phenyl phosphonic dichloride, ethanol amine, and copper (II) chloride, as catalyst. POPO is characterized by H-1-NMR, C-13-NMR, and P-31-NMR and used as additive in polyurethane composites. Moreover, two commercial flame retardant additives [tricalcium diphosphate and hexabromocyclododecane (HBCD)] as well as nanoclay are used to compare flame retardancy of the synthesized additive. Limited oxygen index (LOI) and time burning (flammability test) of polyurethane composites and nanocomposites are evaluated. The results of the LOI test demonstrate that POPO is an excellent flame retardant additive and can be used to improve flame retardancy of polyurethane composites. In addition, increasing the additive content leads to an improvement of the flame retardancy of the samples. The LOI results show, however, that POPO is a good flame retardant, but the high synthesis cost of this flame retardant is a major disadvantage. Thermogravimetric analysis results show that using POPO in polyurethane matrices leads to low thermal stability and high char residue. Moreover, the nanocomposite has better thermal stability than the other samples. Scanning electron microscope micrographs have been used to evaluate the char residue of the samples. These micrographs indicate that POPO is an intumescent flame retardant and HBCD follows a nonintumescent mechanism. Exfoliated/intercalated structures have been shown for nanocomposites by transmission electron microscope. (c) 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci., 127: 1683-1690, 2013