A method of fabricating flexible plastic liquid crystal displays with a polymer-embedded spacers has been developed using phase-separated composite films. Scanning electron microscopy confirms the formation of a solidified polymer layer that strongly holds the spacers at their initial sites in these liquid crystal cells. The electrooptical properties of plastic liquid crystal cells prepared by this method were measured and analyzed under flat and bent conditions. Optics simulations suggested that the use of polymer materials with large permittivity would help decrease the driving voltage of phase-separated composite films (PSCOF) liquid crystal cells.