An electric field that is parallel with a TFT substrate is formed by a pair of electrodes formed on the TFT substrate. Liquid crystal molecules in a light modulating layer are caused to respond electro-optically to the electric field. The light modulating layer is constituted of a liquid crystal material, an optically active substance, and a dichroic dye. The spiral pitch p [.mu.m] of the light modulating layer, the cell thickness d [.mu.m], the twist angle n of liquid crystal molecules, and the interelectrode interval L [.mu.m] are set in ranges of 1.ltoreq.p.ltoreq.15, 1.ltoreq.d.ltoreq.10, n.ltoreq.300.degree., and L<25.