This paper presents a detailed exploration of the development and characterization of multifunctional dual-purpose woven fabrics for thermal protective clothing. Through this research, 69 woven fabric prototypes have been carefully designed and produced, integrating various raw materials, yarn, and woven fabric construction parameters, with the aim of optimizing thermal protection properties while ensuring comfort and durability. The analysis led to the identification of two optimal woven fabric samples, which, upon further testing, exhibited exceptional dimensional stability, crease recovery, tear resistance, as well as abrasion and water resistance. Furthermore, the thermal properties were evaluated, demonstrating exceptional flame resistance, limited heat transmission, and high thermal insulation. Additionally, the study evaluated dynamic thermal properties, contact conductive heat transfer, air permeability, water vapour resistance, and thermal resistance of two clothing systems constructed from selected woven fabrics. Statistical analysis confirms significant differences between clothing systems, highlighting the influence of yarn composition and fabric structure on thermal performance and comfort, where one system exhibits better thermal insulation characteristics suitable for colder environments while the other excels in breathability for warmer climates. The developed woven fabrics meet high standards for protective clothing against heat and flame, surpassing currently available comparable woven fabrics on the market in terms of efficacy and performance. This research provides insights into the intricate balance between protection, comfort, and durability of woven fabrics, contributing to advancements in protective textile technology.