The main goal of this thesis was to develop sustainable and biodegradable flame retardant (FR), as well as multifunctional FR/antimicrobial (AM), finishing of cotton by means of an emerging technique called layer-by-layer (LbL) deposition as a response to technological drawbacks of current commercial FR and multifunctional wet finishing processes. Those are high amounts of conventionally applied chemicals, emission of toxic and cancerogenic formaldehyde during production or product life cycle, loss of tensile strength of FR-treated cotton fabrics, and a large number of process steps at high temperatures, which require high water and energy consumption. Additionally, the current Pyrovatex® process is less compatible with antibacterial finishes, so it is challenging to fulfill commercial requirements for FR/AM cotton, such as limiting oxygen index (LOI) values of ≥ 28%, self-extinguishing in vertical flammability test (VFT) and 100% bacteria reduction at the same time. In this thesis, a conventional treatment that usually requires the addition of very high amounts of different FR compounds has been replaced with an environmentally friendlier treatment. LbL deposition uses the ability of polyelectrolyte aqueous solutions to build charged layered assemblies attracted by weak electrostatic forces on the surface of chemically bleached cotton, with slight influence on mechanical properties of treated cotton fabric and at temperatures below 100 °C. Additionally, by means of LbL deposition, cotton was successfully functionalized with FR and AM agents by using only chemicals from renewable sources such as cereals, legumes, and crustaceans waste or minerals. In this thesis, several environmentally friendly and low-cost agents from renewable sources have been used for LbL: cationic branched polyethyleneimine solution (BPEI, 5 wt%), anionic phytic acid salts solution (PA, 2 wt%, pH 4), cationic chitosan solution (CH, 0.5 wt%, pH 4), and copper (II) sulfate pentahydrate (CuSO4 x 5H2O, 2 wt%) to reduce the flammability of cotton and achieve additional antimicrobial properties. BPEI has been used as a prime layer for better adhesion to cotton. Cotton has been alternately immersed into anionic PA and cationic CH-urea (U) solutions until the desired number of bilayers (BL) has been reached. Each deposition step was followed by rinsing in deionized water (DI) to remove all unbound polyelectrolytes. The final step was the immersion into CuSO4 x 5H2O solution to increase AM properties. The LbL deposited cotton fabric self–extinguished in VFT with the LOI values ranging from 24.5 to 28.0% with 17.3–19.0% of add-ons compared to a conventional process, where the add-on ranges from 20.0–25.0%. For comparison, add-on of non-durable FR finishes such as boric acid/borax, is ~ 10%, and diammonium phosphate/ammonium sulfamate is ~ 15%. Furthermore, the Pyrovatex® process, which requires about 350 g/l of different agents, was replaced by a more environmentally friendly treatment using agents in a concentration usually ≤ 100 g/l with a slight influence on the mechanical properties of the treated cotton fabric (up to ± 14 % change in break strength) at temperatures below 100 °C. In comparison, the Pyrovatex® process reduces the breaking strength by 20-25%, while non-durable FR agents generally reduce the breaking strength. The microscale combustion calorimeter (MCC) values showed a peak heat release rate (pHRR) reduction of 50.9–61.8% and a total heat release rate (THR) reduction of 54.3–70.3%, compared with untreated cotton. Thermogravimetric (TGA) analysis showed the reduction of the first decomposition temperature peak (T1) of 57–66 °C relative to untreated cotton and an increase of char yield (%) at T1 from ~ 43–46% for untreated to ~ 56–63% for FR treated cotton fabric. The post-burn char mainly contains carbon, oxygen, phosphorus, nitrogen (and copper) as measured by energy-dispersive X-ray spectroscopy (EDS) analysis. SEM analyses confirmed N-P intermediates, produced by PA and CH-U upon heating, which phosphorylate cellulose at a temperature below 350–400 °C by producing intumescent char, which acts as a physical barrier that blocks heat and oxygen to the polymer surface. The addition of Cu2+ metal ions further catalyzes cellulose phosphorylation. At the same time, generated non-flammable gases dilute the concentration of the combustible gases and absorb heat, causing the bubbling effect. The FR/AM nanocoating also reduced Gram-negative K. pneumoniae and Gram-positive S. aureus bacteria by almost 100%. Using LbL deposition proved to be an alternative and efficient FR and AM treatment applying environmentally benign compounds from renewable sources in very low concentrations for non durable purposes only. With the wider availability of biodegradable chemicals from renewable sources at lower costs and improving wash durability, LbL deposition has the potential to become an industrially feasible solution for FR or multifunctional FR/AM functionalization of cotton. Future research will be expanded to the improvement of wash durability as well as dye compatibility with conventional dyeing/printing processes.