A novel branched phosphorus-containing flame retardant, CEP, was successfully synthesized by a simple aqueous reaction of carboxyethyl-phenyl hypophosphorous acid and tris- (hydroxymethyl) phosphine oxide: Combining with ammonium polyphosphate, CEPO was applied into poly(butylene terephthalate) to fabricate the composites. The results indicated that both peak heat release rate and total heat release were reduced significantly. Moreover, the higher weight proportion of CEPO to ammonium polyphosphate, the higher flame retardant efficiency was. And high limiting oxygen index values and UL-94 vertical burning test ratings were realized. Thermogravimetric analysis Fourier transform infrared spectra detected the existence-of PH3 which helps to understand the flame-retardant mechanism in the gas phase. The composites formed much residue during the combustion, which is helpful to retard the heat flow as scanning electronic microscope,photos indicate.