In order to develop a highly efficient flame-retardant system, a phosphonate-based ionic liquid named 1-vinyl-3-(diethoxyphosphoryl)-propylimidazolium bromide (IL) was synthesized and introduced into epoxy resin (EP). With only 4 wt% loading, EP/IL composite passed UL-94 V-0 rating, and its limiting oxygen index value increased to 34.9% from 25.9% for neat epoxy resin. The char yield of EP/IL-2 (2 wt%) was improved by 58.3%, and its peak of heat release rate was reduced by 65% compared with that of neat EP. The reason is that the presence of IL promoted the forming of a compact and stable phosphorus-rich residual chars. Unlike traditional additive-type flame retardant, it is very interesting that the introduction of IL changed the color and transparency of EP few and enhanced mechanical property of neat EP remarkably. Owing to the excellent compatibility and steric effect between IL and EP matrix, tensile strength was increased to 108.6 MPa for EP/IL sample from 84.9 MPa for neat EP, indicating the outstanding reinforcement effect of IL on EP composites.