In order to improve the performance of phenolic foam, an additive compound of 9,10-dihydro-9-oxa-10-phosphaphenanthrene-10-oxide (DOPO) and Itaconic acid (ITA) were attached on the backbone of ethyl cellulose (EC) and obtained DOPO-ITA modified EC (DIMEC), which was used to modify phenolic resin and composite phenolic foams (CPFs). The structures of DOPO-ITA were verified by Fourier transform infrared spectroscopy (FT-IR) and nuclear magnetic resonance (1H NMR). The molecular structure and microstructure were characterized by FT-IR spectra and SEM, respectively. Compared with EC, the crystallinity of DIMEC was dramatically decreased, and the diffraction peak positions were basically unchanged. Additionally, thermal stability was decreased and Ti decreased by 24 °C. The residual carbon (600 °C) was increased by 25.7%. With the dosage of DIMEC/P increased, the Ea values of DIMEC composite phenolic resins were increased gradually. The reaction orders were all non-integers. Compared with PF, the mechanical properties, flame retardancy, and the residual carbon (800 °C) of CPFs were increased. The cell size of CPFs was less and the cell distribution was relatively regular. By comprehensive analysis, the suitable dosage of DIMEC/P was no more than 15%.