A novel polymer is developed and used as underlying interlayer to improve donor polymer/acceptor material blend morphology of active layer in polymer solar cells (PSCs). The polymer poly{N-9-[1,17-bis-(diethylphosphonate)heptadecanyl]-2,7-carbazole-alt-5,5-(4,7-di-2-thienyl-2,1,3-benzothiadiazole)} (PCDTBT-Pho) is designed by attaching polar phosphonate moieties to the side chain of the donor polymer, poly[N-9-heptadecanyl-2,7-carbazole-alt-5,5-(4,7-di-2-thienyl-2,1,3-benzothiadiazole)] (PCDTBT). The pendant phosphonate moieties lead to different solubility and proper surface energy of PCDTBT-Pho. As a result, in PSC devices, the underlying PCDTBT-Pho layer facilitates the formation of biscontinuous network morphology in the active layer, makes the donor polymer enriched at the anode side, and induces the donor polymer to crystallize. These improvements contribute to improved charge separation and transport, leading to short-circuit current density enhancement by 12% and power conversion efficiency enhancement by 8% of the PSC devices. Thus, the design and application of PCDTBT-Pho indicate a novel approach to optimize active layer morphology and improve photovoltaic efficiency of PSCs.