Water-soluble poly(vinyl alcohol) (PVA) has great potential for the preparation of environmentally friendly adhesives. However, the application of PVA adhesives in the wood industry has been limited by their poor water and mildew resistance. Herein, a polyester-type PVA adhesive (CPVA) with good bonding performance, water resistance, and antimildew performance was synthesized using PVA and citric acid (CA). The cross-linking reaction, including esterification between PVA and CA chains and etherification between PVA chains, was demonstrated by Fourier-transform infrared (FTIR) and X-ray photoelectron spectroscopy (XPS). Due to the cross-linked structure of the reaction, the CPVA1 (mass ratio of CA/PVA = 1:1) adhesive showed a low soluble content of 5% when it was soaked in water for 24 h. The dry strength, warm water (63 °C) strength, and hot water (93 °C) strength of the plywood hot-pressed from the CPVA1 adhesive at 200 °C were 1.06 1.52, and 1.45 MPa, respectively, which met the Chinese National Standard GB/T 9846-2015. The developed CPVA adhesive also adhered to glass and steel at room temperature. Therefore, the CPVA adhesive developed in this study can serve as a potential candidate for the production of nonformaldehyde wood-based composites with excellent bonding strength, water resistance, and mildew resistance.