The flammability and gas barrier properties are essential for package material. Herein, a highly-oriented self-assembly nanocoating composed of polyvinyl alcohol (PVA) and montmorillonite (MMT) was prepared for endowing polyethylene terephthalate (PET) films with excellent flame retardancy and gas barrier properties. The specific regular nanosheet structure of the PVA/MMT composite nanocoating was confirmed by Fourier transform infrared (FTIR) and X-ray diffraction (XRD). Thermogravimetric analysis (TGA) and the vertical burning test (VBT) suggested that the thermal stability and flame-retardancy of the coated PET films were considerably improved with more pick-up of the resulting nanocoating. When reaching 650 °C, there was still 22.6% char residual left for coated PET film, while only 6% char residual left for pristine PET film. During the vertical burning test, the flame did not spread through the whole PET film with the protection of PVA/MMT nanocoating, and no afterflame was observed. Scanning electron microscopy (SEM) is consistent with vertical burning test, proving that the thermal stability and flame retardancy of coated PET films were considerably enhanced with the increment of PVA/MMT. Thanks to the multi-layer structure, PVA/MMT nanocoating could effectively improve the gas barrier properties of PET films, and the oxygen vapor transmittance rate and water vapor transmittance rate of PET films were more than four hundred times lower and 30% lower than those of neat PET film. Our work demonstrates that bi-functional flame retardant and gas barrier materials could be gained via constructing inorganic/organic highly-oriented self-assembly nanocoating, which is promising in the area of packaging.