In this work, polyhexamethylene guanidine phosphate-ammonium polyphosphate (PHMGP–APP) assembly coating was designed on cotton fabric to achieve enhanced flame retardant and antimicrobial treatment by layer-by-layer (LBL) technology. Attenuated total reflection infrared spectroscopy results indicate that PHMGP-APP coating grows linearly during the assembly process. In vertical flammability test, the assembly coated fabric shows efficient flame retardant properties, such as a reduced burning time, no afterglow, and enhanced residue with intact textile structure. The residue after burning was analyzed by scanning electron microscopy, infrared spectroscopy and X-ray photoelectron spectroscopy and their results suggest that the coating performs perfect flame retardant effect on cotton owing to the synergistic effect of PHMGP with APP by facilitating the formation of char. Antimicrobial tests confirm that the coating has effective antimicrobial action on Escherichia coli and Staphylococcus aureus.