Due to their extraordinary properties, boron nitride nanosheets (BNNSs) have great promise for many applications. However, the difficulty of their efficient preparation and their poor dispersibility in liquids are the current factors that limit this. A simple yet efficient sugar‐assisted mechanochemical exfoliation (SAMCE) method is developed here to simultaneously achieve their exfoliation and functionalization. This method has a high actual exfoliation yield of 87.3%, and the resultant BNNSs are covalently grafted with sugar (sucrose) molecules, and are well dispersed in both water and organic liquids. A new mechanical force–induced exfoliation and chemical grafting mechanism is proposed based on experimental and density functional theory investigations. Thanks to the good dispersibility of the nanosheets, flexible and transparent BNNS/poly(vinyl alcohol) (PVA) composite films with multifunctionality is fabricated. Compared to pure PVA films, the composite films have a remarkably improved tensile strength and thermal dissipation capability. Noteworthy, they are flame retardant and can effectively block light from the deep blue to the UV region. This SAMCE production method has proven to be highly efficient, green, low cost, and scalable, and is extended to the exfoliation and functionalization of other two‐dimensional (2D) materials including MoS2, WS2, and graphite.