Organophosphates are widely used flame retardants (FR) in everyday applications, and their leaching over time is a gaining concern. In this research, 9,10-dihydro-9-oxa-10-phosphaphenanthrene-10-oxide (DOPO) was chosen as a representative organophosphate FR to examine inclusion complex (IC) formation with γ-cyclodextrins (γ-CD) to enhance char formation as well as prevent the unnecessary release of toxic FR chemicals. The addition of ionic salts, sodium chloride (NaCl), and calcium chloride (CaCl2) during the formation increased the yield of IC crystals by up to 50%. However, perfect crystals were formed only when pure IC was formed, devoid of only metal crystals. Continuous melt spinning of cellulose acetate butyrate (CAB) is practically very difficult in the presence of incompatible DOPO in the system. The formed IC was compatible with biopolymer CAB due to hydroxyl groups from γ-cyclodextrin at the periphery. CAB/IC fibers were melt-spun alongside reference pure CAB and CAB/CD fibers. CAB was found to form complexation with CD in the absence of DOPO in the cavity, as corroborated by FTIR and tensile properties. Furthermore, the response to flame was noted as compared to reference pure CAB and CAB/CD fibers. CAB/IC was found to have self-extinguishing behavior via the formation of a char layer even at ∼0.8 wt % DOPO fraction in the fiber.