Motion blur is one of the key factors that affect the image quality obtained by liquid crystal display (LCD) systems. The slow response of display systems, the hold type display characteristic, the smooth eye tracking, and the visual integral effect lead to the perceptual blur of dynamic images. In order to study the method for improving the dynamic image quality of LCD, the image motion compensation preprocessing model and LCD dynamic image perception effect simulation model are established based on the theory of smooth eye tracking. At the same time, different adaptive motion compensation preprocessing methods are proposed for binary eight-bit display systems and binary ten-bit display systems. Through visual perception experiments, the research carries out subjective evaluation and statistical analysis on the effect of dynamic image motion compensation. The results show that the compensation method for eight-bit display systems can significantly improve the perception effect of dynamic images, and the improvement rate is 11.11%; while the compensation method for ten-bit display systems can achieve the perception effect close to the original still images, and the improvement rate is 112.75%. The research results can provide a theoretical reference for improving the dynamic image quality of LCD systems.