In recent years, liquid crystal materials have drawn great interest because of their wide range of applications. Among various thermochromic materials, cholesteric liquid crystalline (CLC) materials have been well studied and reported. CLC materials have the advantages of ready manipulation and multiple color transitions. For the further development of smart clothing and wearable electronics, however, the incorporation of CLC materials into polymers still remains challenging. The difficulties lie in the prevention of leakage of CLC and retention of the cholesteric liquid crystalline phase. In this work, we demonstrate a versatile nonsolvent and phase separation method using polar solvents to incorporate CLC microspheres into polymer matrix. Poly(vinyl alcohol) (PVA), a water-soluble polymer, is chosen as the polymer because of its high transparency and ease to handle. Using spin-coating and wet spinning techniques, PVA/CLC films and fibers can be fabricated. The formation of CLC microspheres in the polymer matrix is characterized through optical and polarized microscopy. Compared with the CLC films, the PVA/CLC composites demonstrate superior thermal stability. Moreover, both PVA/CLC films and fibers exhibit good color stability from the electrical tests. This work provides an effective strategy to prepare polymer/CLC composites, paving a wide avenue toward applications in smart textiles, display technologies, and medical devices.