We developed an in- house technology to overlay liquid crystal (LC) on top of a 850nm Vertical Cavity Surface Emitting Laser (VCSEL) creating a so-called LC-VCSEL. Prior to this, the effect of the cell thickness on the planar alignment of the E7 LC is investigated. It is observed that the LC orientation is planar, uniformly aligned over the whole cell with an average pre-tilt of 22.5 0 in a thin a cell of 13mum thickness; such alignment uniformity is not observed in a thick cell of 125mum. Nevertheless, several domains of good uniformity are still present. Further, the polarization resolved LI characteristics of LC-VCSEL are investigated with and without the insertion of LC in a cell glued directly onto VCSEL package. Before filling in the LC, the VCSEL emits linearly polarized light and this linear polarization is lost after LC filling. The output intensity as a function of polarizer angle shows partial planar alignment of the E7 LC, which is very important for the further advancement of the LC-VCSEL integrated system.