A phosphorous flame retardant (DOPO-MAH) was synthesized through the reaction between of 9,10-dihydro-9-oxa-10-phosphaphenanthrene-10-oxide (DOPO) and maleic anhydride (MAH) and confirmed by FT-IR, H-1 NMR, and 31 P NMR techniques. The obtained flame retardant was then melt blended with poly(butylene terephthalate) (PBT) to prepare flame retardant PBT/DOPO-MAH composites. The composites were characterized by LOI, UL-94, and mechanical tests as well as scanning electron microscopy, thermogravimetric analysis, and differential scanning calorimetry analysis. On adding 20 wt % DOPO-MAH, LOI increased from 20.9 to 25.7 and the UL-94 V-0 rating was achieved, whereas the tensile and flexural properties were notably improved. Torque-time profile during the melt blending and intrinsic viscosity of the composite indicated that DOPO-MAH acted as both flame retardant and chain extender for the PBT matrix. The results showed that PBT/DOPO-MAH composite is a promising material for its good comprehensive properties. (C) 2013 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 130: 1301-1307, 2013