A series of halogen-free phosphorus-containing flame-retardant waterborne polyurethanes (DPOWPUs) were synthesized by comodification with Exolit OP550 and ODDP (a phosphorus-nitrogen flame retardant with biphosphonyl structure), and the structure of DPOWPU was characterized. In addition, the thermal decomposition mechanism of DPOWPU was obtained. With the incorporation of OP550 acting as soft segment flame retardant, the decomposition temperatures of each degradation stage decreased. When the OP550 content reached 13 wt %, the limiting oxygen index increased to 31.4%. The cone calorimetery results of materials were greatly improved. Furthermore, the carbon yields of the DPOWPUs increased distinctly, and the firm char layer could much more efficiently protect the unburned materials and prevent the transmission of mass and heat during thermal decomposition. In addition, the phosphorus content of carbon residues grew progressively, which showed that Exolit OP550 displayed condensed phase flame retardation.