This study aims to develop bacterial cellulose with enhanced flame retardancy and flexibility. The bacterial cellulose was phosphorylated with phytic acid to improve its flame retardancy. Urea and xylitol were used as plasticizers, and their effects in improving the flexibility of bacterial cellulose were compared and evaluated. The optimal conditions for producing phosphorylated bacterial cellulose were found to be as follows: phytic acid:xylitol molar ratio of 1:10, phytic acid concentration of 10% (o.w.f.), and shaking at 30°C for 30 min at 90 rpm in a shaking water bath. A thermogravimetric analysis revealed that phosphorylated bacterial cellulose exhibited enhanced thermal properties compared with the original bacterial cellulose. Fourier transform infrared spectroscopy and X-ray diffraction confirmed that the chemical and crystalline structures of bacterial cellulose remained unchanged after phosphorylation. Mechanical properties such as the tensile strength, flexibility, and dimensional stability of the as-produced phosphorylated bacterial cellulose improved by using xylitol. In particular, the tensile strength and flexibility of the phosphorylated bacterial cellulose increased 5.7 and 2-fold, respectively, compared with those of the original bacterial cellulose. Therefore, this study demonstrated that the flame retardancy and flexibility of bacterial cellulose can be improved by using eco-friendly materials such as phytic acid and xylitol. The as-produced phosphorylated bacterial cellulose can be proposed as a fabric material with sufficient mechanical properties.