Abstract: An oxyalkylated, halogenated product useful in making polyurethane foams is prepared by reacting an epoxide compound with a halogenated aromatic hydroxyl-containing compound (phenol) which is either a monohydroxy or polyhydroxy compound. Said aromatic hydroxyl compound has a hydroxy group attached directly to the aromatic nucleus. By the process of the invention, hydroxyalkylation occurs in the presence of a catalyst selectively active in the predominant oxyalkylation of aromatic hydroxyl groups, said catalyst selected from the group consisting of zinc, magnesium and a zinc or magnesium salt as defined. The reaction mixture can include an aliphatic hydroxyl-containing compound, a neutral phosphorus compound, and aliphatic or aromatic anhydrides or mixtures thereof to enhance the flame-retardant properties of the oxyalkylated product.