In the present work, allylamine exfoliated alpha zirconium phosphate (AXZrP) reinforced unsaturated polyester (UP) nanocomposites were developed and characterized. Exfoliation of alpha zirconium phosphate (α-ZrP) was achieved through Brønsted acid–base interaction using allylamine in different mole ratios. The partially exfoliated α-ZrP possesses a higher concentration of α-ZrP than completely exfoliated. Subsequently, the partially exfoliated α-ZrP was reinforced with UP resin to enhance the thermal and mechanical properties of the resulting composite. Detailed studies using scanning electron microscopic and X-ray diffraction analysis suggest that the AXZrP/UP composite possesses a homogeneous distribution of α-ZrP within the UP matrices. For 10.0 wt% AXZrP/UP composite, the mechanical properties such as tensile and flexural strength were observed to enhance up to 56% and 61% respectively. Further, appreciable enhancement in the flame retardant behavior with V0 rating and high thermal stability with LOI value of 27.1% for 10.0 wt% AXZrP/UP composite was observed. Similarly, the catalytic effect of α-ZrP contributes to enhancing the flame retardant behavior along with rapid char formation.