(Phenoxy)Pentafluorocyclotriphosphazene N3P3(OPh)F5 (PFPN) is investigated as a bifunctional additive in electrolyte to improve the electrochemical performance and thermal stability of LiCoO2 simultaneously when the electrodes cycled to high cutoff potentials. The results show that the electrochemical performance of the electrode material with the additive in the electrolyte is enhanced significantly, with a capacity retention of 91% after 300 cycles, which is a great improvement compared with that of only 67% in base electrolyte. More significantly, the thermal stability of Li x CoO2 (x < 0.5) in the presence of PFPN or covered with decomposed products of PFPN is also remarkably improved. Our results show that the additive can be oxidized prior to EC and DMC, and the decomposition products of PFPN contribute to the LiCoO2/electrolyte interphase film (CEI) with more uniform and denser structure. This polymerized CEI processes an excellent electrochemical stability to assist in inhibiting the further decomposition of the electrolyte and reducing the interfacial impedance growth apparently of the cells with a long cycling condition.