Environmental thallium (Tl) and uranium (U) pollution have attracted great research attention. This study developed a stepwise extraction process to separate Tl and U in an aqueous two-phase system (ATPS) based on 15% polyethylene glycol (PEG6,000) and 10% ammonium sulfate with hydrochloric acid and chlorophosphonazo III (CPA III). The effects of PEG molecular weight, temperature, hydrogen peroxide, HCl, pH, CPA III, equilibrium time, ionic strength, and dissolved organic matter (DOM) on Tl and U separation were studied systematically. The results revealed that 10% H2O2 and 3.2 M HCl in the ATPS rapidly yielded a Tl extraction rate of 95.2%, and the separation factor of Tl and U exceeded 2000 in 5 min; 97.8% of U was extracted in an ATPS containing 0.1 mM CPA III at pH 5–6, and the separation factor of U and Tl reached 5000 in 10 min. The increase of Na+ and NH4+ from 0 to 60 mM did not affect U extraction but promoted Tl extraction and separation, whereas K+ inhibited Tl and U extraction. Moreover, although DOM inhibited Tl extraction, it promoted U extraction and separation. Mechanism analysis indicated that Tl and U extraction in the ATPS was due to the salting-out effect of different anions and complexing agents in different acidities. Relative to the conventional method of organic solvent extraction for Tl and U, the method developed herein has greater safety, lower cost, and more environmental benefits, which can be function appropriately in seriously contaminated wastewater containing Tl and U.