High molecular weight liquid-crystalline polyhydroxyethers, containing functional hydroxy groups, were synthesized from an aromatic diol and the diglycidylether of an aromatic diol. The polymers showed a liquid-crystalline melt when about 70% or more of the aromatic units in the chain were biphenyl units. Tensile modulus values varied from 3 GPa for as-cast films to 6 GPa for drawn films. These polymers are potentially suitable candidates to reinforce common thermoplastics by reactive blending. For this purpose polyhydroxyethers have been prepared, having a liquid-crystalline melt in the processing range of PET, viz. 260-290 degrees C.