A novel photonic crystal fiber structure with high nonlinearity and flattened dispersion is proposed and analyzed. A parameter δ is introduced to measure the nonlinearity and dispersion flattening. The effect of hole size on nonlinearity and dispersion of the photonic crystal fiber (PCF) is analyzed by the plane wave expansion method. The new structure introduces six additional smaller holes between the holes of the first ring to reduce the effective area, and increase the nonlinearity of the fiber. By optimizing the diameters of the first, third, and the additional rings of holes, a PCF with high nonlinearity and flattened dispersion is achieved. The dispersion parameter is within ±0.5 ps/(km·nm) in a 330 nm wavelength range, within ±0.1 ps/(km·nm) in a 230 nm wavelength range, and within ±0.05 ps/(km·nm) in a 200 nm wavelength range. The effective area is 2.26 μm2. The nonlinearitydispersion flattening parameter δ=11.8 ps·W/μm2.