The realm of liquid crystals (LCs) has significantly benefited when amalgamated with the exciting features of nanotechnology. Various nanomaterials (NMs) have shown their potentiality in tailoring the display and non-display characteristics of LC materials. Carbon-based nanomaterials (CNMs) such as carbon nanotubes, graphene oxide, graphene flakes, graphene and carbon dots are found to exhibit synergistic interaction with LCs to provide interesting properties such as low switching threshold voltage, faster switching response, reduced ionic conductivity and the formation of localized pseudonematic domains, etc. The network of benzene rings in the CNMs is found to offer π – π stacking of electrons with a benzene-based core of LC molecules which could provide a susceptible pathway for the strong interaction between the LCs and the CNMs. However, the uniform and stable dispersion of CNMs in the LC matrix has been found to be a challenging step in preparation of CNM/LC composites. Herein, we present a detailed review on the recent research work based on CNM-dispersed LC composites with an emphasis on the methods to obtain uniform CNM/LC dispersion and the dielectric, electro-optical, orientation, photophysical properties, etc, of the composites. Moreover, we have critically discussed the pros and cons of these composites and proposed the future scope of research in this exciting field.