An electronic device may be provided with a display mounted in a housing. The display may have an array of display pixels that provide image light to a user. The array of display pixels may form active display structures with a rectangular shape. The rectangular active display structures may be surrounded by an inactive border region. Liquid crystal light distribution structures may be used to distribute light that is emitted from peripheral portions of the active display structures to a portion of the display overlapping the inactive border region, thereby increasing the apparent area of the display. The light distribution structures may include a liquid crystal cell, a reflecting polarizer, and a reflector that reflects light from the peripheral portions of the active display structures vertically upwards after the light has passed through the liquid crystal cell and has reflected off of the reflecting polarizer.