Display omitted •A novel water-soluble lignin-based N-P flame retardant was synthesized.•Modified wood showed good mechanical properties and dimensional stability.•Modified wood achieved a reduction of 56.8% in THR and 92.3% decrease in TSP.•The flame-retardant mechanism of modified wood has been revealed. The development of effective and eco-friendly wood-based functional composites is crucial for maximizing the value of forest resources. In this paper, we propose a novel method for preparing an aqueous-phase flame retardant (MPUC) using carboxymethylation alkali lignin, phytic acid, and melamine-urea-glyoxal resin. This approach aims to manufacture modified wood (MW/MPUC) with exceptional flame-retardant and smoke-suppressing properties. The results from the cone calorimeter test indicate that the modified wood achieved a remarkable reduction of up to 56.8 % in total heat release and an impressive 92.3 % decrease in total smoke production. Furthermore, the limiting oxygen index increased significantly from 23.6 % (natural wood) to 41.5 % (MW/MPUC-2). Notably, all modified wood successfully passed the V-1 test for UL-94 flammability rating. Further, our investigation into the gas-phase products formed during pyrolysis and the condensed-phase system created after combustion has led us to propose potential flame-retardant mechanisms for these flame retardants. Moreover, modified wood had improved mechanical properties and dimensional stability than natural wood. In addition, we extended the application of MPUC-2 flame-retardant to other flammable materials and demonstrated its excellent flame-retardant properties. Thus, the proposed strategy provided a new approach for preparing wood-based flame-retardant composites with lignin-based N-P flame retardants.