Demand has been growing for natural fibers that are eco‐friendly, renewable, and show sustainable development during their service lifetime. In this study, a series of novel phenolic foam‐based composites, modified by polyaryl polymethylene isocyanate (PAPI), were synthesized and then reinforced with flax fiber mats. The structure and reactive behavior of PAPI and phenolic resin were investigated using Fourier transform infrared spectroscopy. The effect of formulation of PAPI:Resol‐type phenolic resin (PR) on the mechanical properties of the composites were studied. The results suggested that the impregnation of PAPI and PR into mats showed good mechanical properties, furthermore, PAPI:PR in a 3:1 ratio led to the best reinforced material with inner bonding, flexural, and impact strengths of 3.39, 25.91 MPa, and 3.88 kJ/m2, respectively. In addition, the morphology of the composites was observed using scanning electron microscopy. Thermal stability and flame retardancy were examined using thermogravimetric analysis and limiting oxygen index (LOI) tests. It was found that the composites exhibited good thermal stability and high char yields. The LOI value of the modified phenolic foam‐based composites decreased with increasing PAPI content, but it still remained at about 24%. POLYM. COMPOS., 39:1809–1817, 2018. © 2016 Society of Plastics Engineers