In this work, a phosphorus-containing soybean oil-based polyol (PSOP) was successfully synthesized from epoxidized soybean oil by a ring-opening reaction with dibutyl phosphate. A phosphorous polyol (HEDP-PO) was synthesized by polymerization between 1-hydroxyethylidene-1,1-diphosphonic acid (HEDP) and propylene oxide (PO). The two new polyols were used together in the formation of flame-retardant polyurethane foams (FRPUF), which depicted good thermal stability and flame retardancy performance. The addition of PSOP/HEDP-PO polyols resulted in a reduction of cell size and an increasement of cell numbers of PUF composites, whose apparent density was observed to increase. Besides, the LOI value of PUF-80 could reach 23.7% and satisfy the V-0 rating in the vertical burning test. The cone calorimeter test showed a reduction in the heat release rate from 395 kW/m2 to 251 kW/m2 and the total heat release from 24.9 MJ/m2 to 18.0 MJ/m2. Polyurethane foam exhibited good flame retardancy because PSOP/HEDP-PO played a great free radical quenching effect in the gas phase by releasing the PO* and PO2* free radicals. Meanwhile, a more dense and complete carbon layer was formed to cut off the transfer of heat and oxygen between the matrix and the ambient.