Abstract Stressed liquid crystals (SLCs) are fast light modulating materials based on polymer/liquid crystal composites. We used polarizing microscopy and fluorescence confocal microscopy to investigate liquid crystal domain sizes and shearing mechanism for SLCs with different domain sizes. We observed the stretch of polymer matrices and the reshaping of liquid crystal domains in SLCs during shearing. In addition, we demonstrated the shearing effects on reducing light scattering and the electro‐optical performances of these samples.