An effective flame retardant N, N′-bis [salicylidene hypophosphorous acid]-1, 2-ethylenediamine (SHPE) was synthesized by a Kabachnik-Fields reaction between hypophosphorous acid and a Schiff base compound. The chemical structure was confirmed by FTIR, 1HNMR and organic element analysis. SHPE was melt blended with poly (lactic acid) (PLA) matrix to enhance the flame retardancy. Fire behavior evaluation of PLA composites indicated that the presence of 10 wt% SHPE increased the LOI value up to 28.3%, developed the UL-94 grade to V-0 rating, and significantly decreased the peak heat release rate (pHRR) and total heat release (THR) of PLA composites. The analysis of X-ray photoelectron spectroscopy (XPS), FTIR, Raman spectrum and scanning electron microscope (SEM) demonstrated that SHPE exerted flame retarding effect in both gas and condense phases. It was proposed that the presence of SHPE catalyzed random chain scission of PLA, and accelerated the formation of melt dripping to take away heat during combustion. The elongation at break of PLA/SHPE composites were increased compared with that of PLA. The compatibility of SHPE and APP in PLA was also compared.