A halogen-free, flame retardant composition comprises thermoplastic polyurethane, olefin block copolymer, carbonyl-containing olefin polymer compatibilizer, and flame retardant package comprising bisphenol-A bis(diphenyl phosphate) and/or resorcinol bis(diphenyl phosphate), a nitrogen/phosphorus based, halogen-free flame retardant, and epoxidized novolac. The composition that will not only be processed easily to make a wire or cable sheath but also pass both the VW-1 flame retardancy test and the UL1581 heat deformation test at 150° C. exhibits good tensile and flexibility properties.