It is well known that doping liquid crystals (LCs) with nanoparticles can readily change the physical and electro-optical properties of LC mixture. In this paper, we report on how the electro-optical properties and thermal stability of an LC system were enhanced by dispersing zirconia (ZrO2) nanoparticles in nematic LCs on ion-beam irradiated polyimide layers. Homogeneous LC alignment was achieved and ZrO2/LC mixture was applied in twisted-nematic (TN) mode. The addition of ZrO2 nanoparticles contributed to improvement of electro-optical properties in the TN LC cell by lowering voltage operation and decreasing response time. The TN LC cells with a ZrO2 nanoparticle concentration of 2.0 wt% showed the lowest threshold voltage of 2.0 V and the fastest response time of 15.3 ms. This enhanced electro-optical performance was likely due to van-der waals interactions and the screening effect of the ZrO2 nanoparticles in the LC medium. The thermal stability of the ZrO2/LC mixture was also improved compared to a pristine LC system.