The light leakage of twisted nematic (TN) liquid crystal displays is investigated. While the TN mode has a robust structure in regard to light scattering, due to thermal fluctuations of the liquid crystals and light leakage from imperfect rubbing defects, it maintains significant residual retardation of the liquid crystal layer in the black state. The residual retardation is induced by the azimuthally twisted liquid crystal alignment near substrate surfaces and causes major light leakage in the black state. We investigated several methods to compensate for the residual retardation, and the methods include the adjustment of the helical power of the liquid crystal material, the increase of driving voltage, the control of rubbing direction and a newly designed compensation film with a small angle twist. Though all these methods improve the contrast ratio by about 30%, each method has its own weaknesses and limitations. The development of a new compensation film would provide a good chance for future TN applications.