Currently, polymer-integrated planar lightwave circuits (PLCs) have important functions in modern optical communication systems as basic building blocks for various optical components, such as optical waveguides, switches, splitters, and filters. PLCs have a high potential in the production of low-cost and compact devices because of their structural flexibility, ease of processing, integration, packaging, and mass production capabilities. Liquid crystal (LC) has gained increasing attention in optical waveguide application because of its large electric-optic effect for tuning purposes and sensing capability for sensor making. Numerous studies have been conducted worldwide to investigate and explore LCs with fast response and low driving voltage, which can be supplied to the huge display application market. These advantages make LCs quite suitable for tunable optical devices. Therefore, the use of LCs in a polymer-integrated waveguide could open another window for making low-cost, high speed, and efficient tunable optical components and sensing devices. However, LC is a relatively new material in waveguide applications. Compatibility problems, liquid crystal alignment, and high optical loss are the typical challenging issues confronting the design and fabrication processes. Consequently, this research aims to establish a good fundamental understanding on LCs for applications in planar lightwave waveguide technology and to provide solutions to problems in developing optical devices, such as variable optical attenuators (VOAs), optical switches, and optical sensors. Recently, researchers have proposed the inverted optical waveguide structure for VOA fabrication by using LC as the tunable cladding material. This structure provides a flat top surface for LC alignment and manipulation. However, a detailed study must first be carried out to understand the interaction between the LC and the optical waveguide for VOA applications because studies on the design and optimization of this method are not available. This study focuses on the inverted optical waveguide structure and its application in developing other LC-based tunable waveguide devices. Polymer dispersive LC (PDLC), a new class of LC that is mixed with a polymer and placed on top of the waveguide, was successfully used in assembling an optical waveguide VOA. Therefore, PDLC is a potential alternative for LC. The leakage problem of LCs could be solved by using PDLC. Second, the optical switch application with the inverted structure was used, where the LC was placed on top of the waveguide was studied. The use of a high refractive index polymer as the waveguide core with a two-mode channel waveguide directional coupler was proposed. This proposed structure provides high sensitivity to changes in the LC cladding index. The effect of the high optical loss of LCs on the switching performances can also be minimized with this proposed design. Furthermore, the use of an optical waveguide with LC for sensing applications was investigated. LC is a good candidate for chemical sensing if suitable chemical is doped inside it. The working principle of the optical sensor is based on the VOA design. LC changes can be indicated by the waveguide output power. Ethanol gas was successfully detected using a copper salt-doped LC on the inverted waveguide structure. The use of a porous polymer thin film with nano-pores for LC storage in solving the leakage problem for gas sensing application has also been suggested. These waveguide sensors can be packaged with optical fibers for remote sensing of hazardous gases. Another advantage of these waveguide sensors is that the same platform can be used to detect other gases, such as dangerous, flammable, and toxic gases, by simply selecting the suitable chemically doped LCs. In summary, the results generated in these studies provide useful information in fabricating LC-based waveguide devices. This information can help in selecting the waveguide structure and the proper material to design LC-based optical tunable devices.