Film morphology and electrooptic performance of poly (styrene-co-ethylmethacrylate) (PSEMA)/E7 composite films have been studied for various copolymer compositions. The effects of copolymer composition on the optical response of the films were measured as function of voltage and frequency of applied AC electric field. It was found that the LC domain size increased significantly with styrene content of PSEMA up to 32.5%, beyond which a decrease was noted. The electrooptic responses were mainly governed by the film morphology.