A (polymer/liquid crystal:LC) composite film, in which LC molecules are embedded in a 3D polymer matrix, shows reversible light scattering-light transmission switching upon off- and on-a.c. electric fields, respectively. The electro-optical behavior of the composite film was strongly dependent on the LC channel (domain) size in the composite film. The transmittance increased, and also, the rise and decay response times ((tau) R and (tau) D), decreased and increased, respectively, with an increase in the size of LC channel (domain). The electro- optical response of LC molecules is strongly influenced by the miscibility and anchoring strength of LC molecules to the polymeric wall. The miscibility between both phases was evaluated from a distribution of relaxation time for an interfacial polarization. The anchoring effect was also investigated by measuring nonlinearity of the dielectric constant for the composite system.