Incorporating bio-based flame retardants into polylactic acid (PLA) for improving its fire retarding performance has always been attractive to researchers worldwide, while the synthesis of bio-based flame retardants always involves organic solvents. The drawbacks of bio-based flame retardants are also nonignorable, such as strong hydrophilicity, aggregation, and deterioration of the mechanical properties of PLA. Here, the biobased flame retardant APP@CS@Si was assembled in the water phase with ammonium polyphosphates (APP) and chitosan (CS) and carboxylated silicone oil (Si-COOH/Si). The results showed that the Si-COOH shell not only decreased the hydrophilicity of the flame retardant but also had superior fire retardancy due to its improved char formation ability. Only 2 wt % APP@CS@Si can endow PLA with satisfying flame retardancy such as the UL-94 V-0 grade. Higher values of the fire propagation index (0.150) and flame retardancy index (1.33) were also achieved by PLA with 4 wt % APP@CS@Si compared with those of PLA with the same loading of APP@CS. Interestingly, the total smoke release amount (TSR) of PLA/4APP@CS@Si was 60% lower than that of PLA/ 4APP@CS, exhibiting its excellent smoke suppression ability. Moreover, Si-COOH could also be deemed as a soft shell to improve the toughness of PLA with increased impact strength and elongation at break of the PLA composite by 20 and 16%, respectively.