Dynamic drive scheme (DDS) is known widely as passive matrix addressing that obtains both high‐speed re‐writing and a high contrast ratio in the field of cholesteric liquid crystal displays (LCDs). However, DDS has a serious problem in that the proper drive condition is very narrow and it is largely influenced by individual differences in LCDs that arise during their production. We have developed a new auto‐calibration system that adjusts both the contrast ratio and color balance automatically using capacitances of effective pixels and temperature compensation models that utilize the physical properties of cholesteric LCDs. We have managed to optimize the driving conditions between 5 and 35 °C with this method, and obtained both stable and high‐quality color images where the reflectance is 36%, contrast ratio is 8, and NTSC ratio is 20%. This auto‐calibration system has been able to greatly improve the production yield of cholesteric LCDs and made it possible to make practical use of cholesteric LCDs.