ABSTRACT The changes in physical properties obtained by dispersing hydrophilic carboxylated graphene quantum dots (GQDs, <10 nm), which are non-toxic, biocompatible, and eco-friendly, into a room-temperature nematic liquid crystal, 5CB (4-pentyl-4ˈ- biphenylcarbonitrile) are described. Nematic–isotropic transition temperatures, polarising microscopy, electro-optic, photoluminescence, and dielectric investigations are reported for two composites having concentrations of GQDs of 0.25 and 1.0 wt.% in 5CB and compared to pristine 5CB. At the lower concentration (0.25%) of GQDs there is an enhancement in the order parameter by 5.49%, the birefringence by 1.28%, and the activation energy for dielectric relaxation by 4.4% compared to pure 5CB. However, at the higher concentration (1%), aggregation of GQDs occurs. This is apparent in optical textures and resulted in the deterioration of optical and electrical properties compared to 5CB. The photoluminescence spectrum of both concentrations of GQDs are centred at the same wavelength; however, the 1% GQD-5CB mixture exhibits significant quenching and may be suitable for some optical devices. Overall, our results support that, in addition to promoting sustainable, heavy-metal-free, and environmentally safe technologies, a low concentration of GQDs in LCs produces composites that have superior electrical and optical properties; thus, making them suitable for a variety of photonics and display applications.