Aziridinyl phosphazene (NPAZ) was introduced to aqueous-based polyurethane (PU) as a flame retardant and a postcuring agent, mainly because of the presence of phosphorus compositions, as well as the reactive aziridinyl groups on NPAZ. This dual-function NPAZ was prepared from the substitution reaction of hexachlorocyclotriphosphazene with aziridine. Aqueous-based PU was treated with NPAZ and its curing reaction took place upon drying. The performance properties of this NPAZ cured PU (NPAZ-PU) were improved and better than those of the original PU. The phosphorus composition from NPAZ was evenly distributed on this NPAZ-PU film, which was identified by the phosphorus mapping on the energy dispersion spectrum. The physical and mechanical properties of NPAZ-PU were evaluated by the measurements of the gel content, water uptake, ethanol swelling, and tensile stress. The thermal properties of NPAZ-PU were investigated by thermogravimetric analysis (TGA), TG analyzer-interfaced FTIR, and dynamic mechanical thermal analysis. Furthermore, its combustion behaviors were demonstrated with the data of a cone calorimeter measurement.