Despite extensively implemented in research, it remains challenging but highly desirable to develop ammonium polyphosphate (APP) based polyurethane (PU) combining with excellent flame-retardancy and improved mechanical properties. Herein, the hydroxyl-decorated APP (OH-APP) was successfully fabricated through a facile, green yet efficient cation exchange reaction with N-methylethanolamine, and utilized as a multifunctional reinforcing agent for solvent-free two-component polyurethane in the curing process. Results demonstrate that the conjugation of OH-APP imparts the resultant cured PU samples, abbreviated as PU/OH-APP, with enhanced fire safety and smoke suppression performance, as evidenced by the considerable decrease in peak heat release rate (PHRR), total heat release (THR), peak smoke production rate (PSPR) and total smoke production (TSP) by 75.4 %, 30.1 %, 64.3 % and 14.4 % over that of pure PU. Furthermore, the tensile strength of PU/OH-APP is observably improved by 66.5 %, while the ductility is well-maintained, highlighting its promising potential in industrial applications. Hopefully, this work is committed to open a new avenue to develop APP-based PU with outstanding performances through covalent anchoring approaches.