A new composite polymer electrolyte (CPE) containing a flame-retardant material, Mg(OH)2, is fabricated via a two-step process: porous poly(vinylidene-co-hexafluoropropylene) films composited with different Mg(OH)2 contents are first prepared via casting and extraction steps, and they are then impregnated with a liquid electrolyte. As the Mg(OH)2 content in the CPEs increases, their flame-retardant properties are greatly improved compared to those of the bare polymer electrolyte. Moreover, the better wettability of Mg(OH)2 toward a liquid electrolyte leads to higher ionic conductivities of CPEs, thereby resulting in a better rate capability in LiCoO2/graphite lithium-ion polymer batteries (LiPBs). However, the Mg(OH)2 content must be limited to less than 40 wt% to maintain the mechanical properties of the corresponding CPEs.