Poor thermal stability and thermoplastic processability are the main obstacles for wide application of polyvinyl alcohol, which is a typically water-soluble polymer with excellent mechanical properties, biocompatibility, barrier properties and biodegradability. In this work, a novel method was demonstrated for preparing PVA based material with improved thermal stability, low additive loading, and without impairing the inherent good properties of PVA. Poly (1-vinyl-3-ethyl-imidazolium bromide) (PEtVIm-Br) was synthesized and used as both a thermal stabilizer for PVA and a compatibilizer for PVA/graphene nanocomposites. A 49% improvement in tensile strength and 65% improvement in the elongation at break were achieved by incorporating 2.5 wt% of PEtVIm-Br and 0.5 wt% of graphene into PVA matrix. The thermal stability of the PVA/PEtVIm-Br-graphene composite has been investigated by thermogravimetric analysis (TGA), TGA-DSC simultaneous thermal analysis, and TGA coupled with FTIR. With the addition of PEtVIm-Br-graphene, the elimination reaction of PVA at the initial stage of pyrolysis was suppressed remarkably, while the activation energy for pyrolysis of the nanocomposite increased obviously, resulted in a much improved thermal stability, comparing to pure PVA. The volatile products of pure PVA and PVA composites were detected by TGA/FTIR and Py-GC/MS. The improvement in thermal stability of PVA/PEtVIm-Br and PVA/PEtVIm-Br-graphene composite comparing to pure PVA may attribute to the ability of capturing free radicals of PEtVIm-Br and the barrier effect of well-dispersed graphene.