A new liquid crystalline light modulating cell and material are characterized by phase-separated polydomains of polymer networks dispersed in chiral nematic liquid crystal having positive dielectric anisotropy, the polymer being present in an amount less than 10 % by weight of the total weight of the material and, preferably, being cross-linked. The liquid crystal in the vicinity of the polydomains is less responsive to an applied field than surrounding regions of liquid crystal, whereby the new material exhibits different optical states in response to different field conditions. In one embodiment, the material is light scattering in a field-OFF condition and optically clear in a field-ON condition, while in another embodiment, the new material is optically clear in a field-OFF condition and light scattering in a filed-ON condition. In still another embodiment, the new material exhibits stability at zero field in both a colored, light reflecting state and a light scattering state, as well as being optically clear in the presence of a field.