Encapsulation of the nematic liquid crystal N-(4-methoxybenzylidene)-4-butylaniline (MBBA) into the core of poly(vinylpyrrolidone) (PVP) microfibers has been accomplished via coaxial electrospinning for the first time. Data from optical microscopy, two-dimensional Raman mapping, differential scanning calorimetry, and dielectric spectroscopy have been employed to gain detailed insights into the confinement effects on MBBA in a semiflexible polymer sheath. The electrospun fiber diameters could be tuned easily by modifying the flow rate of MBBA, and both the MBBA core and PVP sheath diameters were determined via Raman line cuts. The PVP sheath induced alignment of MBBA, where its long axis is parallel to the fiber axis. Further, the alignment of MBBA led to iridescence in the fibers, which was found to be temperature-sensitive and reversible. Surprisingly, at temperatures below 0 °C, the phase-transition temperatures of confined MBBA are different than the neat and one of its smectic phases is inhibited by the PVP sheath; however, the phases that occur above 0 °C appear to be unrestricted. Thus, electrospun core−sheath fibers with MBBA and PVP provide a useful platform for a semiflexible material, where it is especially necessary to control liquid crystal alignment and polymorphs or phases at low temperature. Overall, the results reported here provide new and important considerations for the effects of confinement on liquid crystals in semiflexible media.