Aluminum butylmethylphosphinate AiBMP as a flame retardant and phenolphthalein as a synergistic agent were applied in a thermoplastic polyester elastomer (TPEE)) in the current study. The thermal properties, flame retardancy, crystallization and mechanical properties of TPEE/AiMBP with or without phenolphthalein were investigated using various characterizations, including the limiting oxygen index (LOI), vertical burning test (UL 94), thermogravimetric analysis TG, differential scanning calorimetry, microcombustion calorimeter (MCC), scanning electron microscopy (SEM), and mechanical tests. The results revealed that AiBMP alone is an efficient flame retardant of TPEE. Adding 15 wt.% AiBMP increases the LOI value of TPEE from 20% to 36%. The formula TPEE-15 AiBMP passed the UL 94 V-0 rating with no dripping occurring. The MCC test shows that AiBMP depresses the heat release of TPEE. In comparison with pure TPEE, the heat release rate at peak temperature and the heat release capacity of TPEE-15AiBMP are reduced by 46.1% and 55.5%, respectively. With the phenolphthalein added, the formula TPEE/13AiBMP/2Ph shows a higher char yield at high temperatures (>600 °C), and the char layer is stronger and more condensed than TPEE-15AiBMP.The tensile strength and elongation at break values of TPEE-13AiBMP-2Ph are increased by 29.63% and 4.8% in comparison with TPEE-15AiBMP. The SEM morphology of the fracture surface of the sample shows that phenolphthalein acts as a plasticizer to improve the dispersion of AiBMP within the matrix. The good char charming ability of phenolphthalein itself and improved dispersion of AiBMP make the TPEE composites achieve both satisfying flame retardancy and high mechanical properties.