Atmospheric compensation has been demonstrated using a liquid crystal light valve as a monolithic, integrated, wavefront sensor-corrector in a closed loop, all-optical configuration. For successful demonstration of this device, liquid crystal candidates were surveyed for high birefringence and fast time response in the blue region. BDH-E44 was selected with the highest figure of merit and a birefringence of 0.342 at 410 nm. Accelerated photostability studies indicated that the exclusion of oxygen/moisture extended the LC lifetime by twofold, while photo-exposure and applied electrical signal limited the lifetime due to photoinduced electrochemical degradation. A sealed BDH-E44 test cell after 60 Wh/cm(2) of 405 +/- 20 nm light and electrical exposure exhibited 3% decrease in the effective Delta n and a 12% shift in the operating voltage. However, the LC recovered from the sealed test cell after photo exposure showed no significant change in composition.