A kind of novel material of holographically polymer-dispersed liquid crystal (HPDLC) is reported. The hologram can be recorded due to the diameter of LC droplet, which is far shorter than light wavelength. Moreover, the diffraction efficiency can be modulated by the application of electric field. In this paper, the theory of HPDLC formation is analyzed in detail, the composition of the material and the way of preparation are given, and the diffraction efficiency and the morphology observed by SEM are studied. The HPDLC is compared with traditional PDLC. This material has the potential and broad application in the field of optical communication and information storing.