A liquid crystal display using a compensating film includes a liquid crystal panel having upper and lower substrates, and a liquid crystal layer interposed between; a first compensating film formed over an inner surface of at least one of the upper substrate lower substrates; a second compensating film formed over an outer surface of at least one of the upper and lower substrates; and first and second polarizing plates attached over the second compensating film and on an outer surface of the other one of the upper lower substrates such that a first optical transmission axis of the first polarizing plate is perpendicular to a second optical transmission axis of the second polarizing plate. The compensating film is formed inside the liquid crystal panel, thereby preventing light leakage at a viewing angle and improving the viewing angle characteristics.