Practical application of functionalized graphene in polymeric nanocomposites is hampered by the lack of cost-effective and eco-friendly methods for its production. Here, we reported a facile and green electrochemical approach for preparing ferric phytate functionalized graphene (f-GNS) by simultaneously utilizing biobased phytic acid as electrolyte and modifier for the first time. Due to the presence of phytic acid, electrochemical exfoliation leads to low oxidized graphene sheets (a C/O ratio of 14.8) that are tens of micrometers large. Successful functionalization of graphene was confirmed by the appearance of phosphorus and iron peaks in the X-ray photoelectron spectrum. Further, high-performance polylactic acid/f-GNS nanocomposites are readily fabricated by a convenient masterbatch strategy. Notably, inclusion of well-dispersed f-GNS resulted in dramatic suppression on fire hazards of polylactic acid in terms of reduced peak heat-release rate (decreased by 40%), low CO yield, and formation of a high graphitized protective char layer. Moreover, obviously improvements in crystallization rate and thermal conductivities of polylactic acid nanocomposites were observed, highlighting its promising potential in practical application. This novel strategy toward the simultaneous exfoliation and functionalization for graphene demonstrates a simple yet very effective approach for fabricating graphene-based flame retardants.