In the present study, the effects of intumescent flame retardant (IFR) incorporating organically modified montmorillonite (O-MMT) on the flame retardancy and melt stability of PLA were investigated. The flame-retardant PLA was prepared using a twin-screw extruder and a two roll mill. Then, the influence of IFR and MMT on flame retardancy and melt stability was thoroughly investigated by means of limiting oxygen index (LOI), vertical burning test, thermogravimetric analysis, scanning electronic microscopy, melt flow index (MFI), and parallel plate rheological experiments. The experimental results show that the IFR system in combination with MMT has excellent fire retardancy, i.e. the sample could achieve a UL94 V-0 rating and LOI value increases from 20.1 for pristine PLA to 27.5 for the flame-retarded PLA. MFI and rheological measurement indicate that O-MMT significantly enhances the melt stability and suppresses the melt dripping. Copyright © 2009 John Wiley & Sons, Ltd.