In this paper, we review liquid-crystal-on-silicon (LCoS) technology and focus on its new application in emerging augmented reality (AR) displays. In the first part, the LCoS working principles of three commonly adopted LC modes—vertical alignment and twist nematic for amplitude modulation, and homogeneous alignment for phase modulation—are introduced and their pros and cons evaluated. In the second part, the fringing field effect is analyzed, and a novel pretilt angle patterning method for suppressing the effect is presented. Moreover, we illustrate how to integrate the LCoS panel in an AR display system. Both currently available intensity modulators and under-developing holographic displays are covered, with special emphases on achieving high image quality, such as a fast response time and high-resolution. The rapidly increasing application of LCoS in AR head-mounted displays and head-up displays is foreseeable.