To improve flame retardancy of wood, a novel high-water-retention and self-healing polyvinyl alcohol/phytic acid/MXene hydrogel coating was developed through facile one-pot heating and freeze–thaw cycle methods, and then painted on wood surface. The coating exhibit excellent self-healing property and significantly enhanced water-retention property (water content ≥ 90 wt%), due to the increased hydrogen bonds within the coating system with the presence of MXene nanosheets. Compared to pristine wood, the flame retardancy of coated wood is greatly improved, such as passed V0 rating in UL-94 test, increasing time to ignition (TTI, from 32 to 69 s), and decreased heat release rate and total heat release by 41.6% and 36.14%. The cooling effect and large thermal capacity of high-water-retention hydrogel, and physical barrier effects for flammable gas products, heat and oxygen by MXene nanosheets and the compact char layer formed during combustion play key roles in the flame retardancy enhancements of the wood. High thermal stability of MXene nanosheets is another beneficial factor. The detailed flame-retardant and self-healing mechanisms were proposed.