A new light modulating material using interconnected unidirectionally oriented microdomains of a liquid crystal, dispersed in a stressed polymer structure, is provided. The light modulating material is prepared by dissolving the liquid crystal in an uncured monomer and then curing the monomer so that the polymer forms a well-developed interpenetrating structure of polymer chains or sheets that is uniformly dispersed through the film. When the film is subjected to stress deformation the liquid crystal undergoes a change in its unidirectional orientation. The concentration of the polymer is high enough to hold the shear stress, but is as low as possible to provide the highest switch of the phase retardation when an electric field is applied. The new materials are optically transparent and provide phase modulation of the incident light opposed to the low driving voltage, linear electro-optical response, and absence of hysteresis. It has been shown that these new materials may be successfully used in display applications, optical modulator, and beam steering devices.