Morphology and electrooptic properties of poly (styrene-co-methyl methacrylate) (PSMMA)/nematic liquid crystal composite films have been studied for varying copolymer composition. Effects of copolymer composition, voltage and frequency of applied AC electric field on the optical response of the films were measured, and the results were interpreted in terms of aggregation structure of the film, the interfacial interactions between the LC and the polymer, the magnitude of external field, and refractive indices of LC and polymer.