The use of diphenyloctyl phosphate (DPOF) as a flame-retardant additive in liquid electrolyte for Li-ion batteries is investigated. Mesocarbon microbeads (MCMB) and LiCoO2 are used as the anode and cathode materials, respectively. Cyclic voltammetry (CV), differential scanning calorimetry (DSC), electrochemical impedance spectroscopy (EIS), and scanning electron microscopy (SEM) are used for the analyses. The cell with DPOF shows better electrochemical cell performance than that without DPOF in initial charge/discharge and rate performance tests. In cycling tests, a cell with DPOF-containing electrolyte exhibited better discharge capacity and capacity retention than that of the DPOF-free electrolyte after cycling. These results confirm the viability of using DPOF as a flame-retardant additive for improving the cell performance and thermal stability of electrolytes for Li-ion batteries.