Polyethylene glycol borate (PEG-BAE) toughening agents were prepared from the esterification reaction between boric acid and PEG and characterized by FTIR and NMR. The effect of reaction conditions such as reaction temperatures, reaction times, and entrainer amounts on the esterification reaction rate was studied. Incorporation of PEG-BAE into phenolic (PF) foams leads to an improvement in the flexural and compression strengths, and a reduced pulverization ratio compared with pure and PEG-toughened foams. The LOI results illustrate the flame-retarding effect of PEG-BAE is better than that of pure PEG, with LOI in the range 35.5-39.0%, and all PF foams pass UL 94 V-0 rating. Cone calorimeter results indicate that the incorporation of PEG400 increases the peak heat-release rate (PHRR) of PF foam by 38%, whereas PEG400-BAE results in a slightly decreased PHRR. Moreover, thermal decomposition of pure and toughened PF foams was investigated.