Introducing bio-oil into phenolic foam (PF) can effectively improve the toughness of PF, but its flame retardant performance will be adversely affected and show a decrease. To offset the decrease in flame retardant performance, montmorillonite (MMT) can be added as a promising alternative to enhance the flame resistance of foams. The present work reported the effects of MMT on the chemical structure, morphological property, mechanical performance, flame resistance, and thermal stability of bio-oil phenolic foam (BPF). The Fourier transform infrared spectroscopy (FT-IR) result showed that the –OH group peaks shifted to a lower frequency after adding MMT, indicating strong hydrogen bonding between MMT and bio-oil phenolic resin (BPR) molecular chains. Additionally, when a small content of MMT (2–4 wt %) was added in the foamed composites, the microcellular structures of bio-oil phenolic foam modified by MMT (MBPFs) were more uniform and compact than that of BPF. As a result, the best performance of MBPF was obtained with the addition of 4 wt % MMT, where compressive strength and limited oxygen index (LOI) increased by 31.0% and 33.2%, respectively, and the pulverization ratio decreased by 40.6% in comparison to BPF. These tests proved that MMT can blend well with bio-oil to effectively improve the flame resistance of PF while enhancing toughness.