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 a 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.