A manufacturing method of ladder-like phosphorus-containing polysilsesquioxanes nanocomposite material is disclosed. The method uses a reaction between ladder-like phosphorus-containing polysilsesquioxanes and modified epoxy. Besides improved char yield and limiting oxygen index, thermal degradation rate of the nanocomposite material is lowered dramatically so that the nanocomposite material possesses excellent flame retardance and thermal stability. Moreover, optical transparency of the nanocomposite material according to the present invention is still good, not being reduced by increased amount of polysilsesquioxanes. Thus the nanocomposite material is applied to decorative paints or protective paints.