As a result of global warming, fire outbreaks are becoming a common occurrence. There is, therefore, the need for an effective, low-cost and environmentally friendly fire-retardant material. Amine-terminated polyhedral oligomeric silsesquioxane, ATL-POSS, is a low-cost, water-soluble, fire-retardant material based on aminosilane coupling agents. Because of its solubility in water, it can serve as a general-purpose fire retardant. The ATL-POSS nanoparticles reported in this paper have high char retentions of about 75 and 54% in nitrogen and air atmospheres, respectively. Differential scanning calorimetry (DSC) was used to determine the phase transition temperatures. It was shown that ATL-POSS is an amorphous material. The thermal stability and rate of decomposition of POSS was determined by using thermogravimetric analysis (TGA). The TGA derivative curves (DTA) show that the degradation of ladder-like POSS occurred in multiple stages and that the rate of degradation is affected by the heating rate. The mechanism of decomposition of ATL-POSS was determined by using Fourier transform infrared spectroscopy, FTIR. The FTIR technique was chosen for this study because of its accessibility and ability to distinguish ladder-like POSS from the cage-type POSS structures. The FTIR spectra showed that the -Si-O-Si- cyclic structure was the predominant structure of POSS. By analyzing the FTIR spectra of the thermally treated POSS residues, obtained at the specified test temperatures, the detailed degradation mechanism of POSS was inferred. It was shown that the terminal silanol group was degraded at test temperatures below 400 °C. Silica was shown to be the final product of the pyrolysis of POSS. The presence of the FTIR transmission peaks at 1000 and 1100 cm−1, due to asymmetric vertical and horizontal stretching vibrations of the Si-O-Si, respectively, was the key evidence used to infer the ladder-like structure of POSS.