A diethylphosphonate-containing benzoxazine compound (DEP-Bz) to be used as a multi-functional reaction agent for preparation of high performance polybenzoxazine thermosetting resins has been reported. The chemical structure of DEP-Bz has been characterized with FTIR, H-1 NMR, and elemental analysis. The phosphonate groups of DEP-Bz could convert into phosphonic acid groups which could catalyze the ring-opening addition reaction of benzoxazines, to demonstrate the thermally latent catalytic effect of DEP-Bz on the polymerization of benzoxazine compounds. Moreover, DEP-Bz could also serve as a reactive-type modifier for polybenzoxazines and other thermosets. DEP-Bz modified polybenzoxazine resins have shown relatively low reaction temperature (about 190 degrees C), high mechanical strength with a storage modulus of about 3.0 GPa, and high flame retardancy with a limit oxygen index of about 32. (c) 2013 Wiley Periodicals, Inc. J. Polym. Sci., Part A: Polym. Chem. 2013, 51, 3523-3530