We present experimental studies of the relaxation of concentration fluctuations in a semidilute solution of polystyrene (PS) (30% by weight) in 4-cyano-4'-n-octyl-biphenyl (8CB) (70% by weight) using the photon correlation spectroscopy (PCS). In the homogeneous phase there are two modes of relaxation. The slow one (typical time scale is pi(s)=0.001 s) is due to the diffusion of polymer chains (of molecular mass 65 000) in the LC matrix (of molecular mass 290), while the fast one has the time scale of the order of pi(f)approximate to0.00001 s. The amplitude of the fast mode is much weaker than the one for the slow mode. Moreover it does not depend on the scattering wave vector, q. The value of the diffusion coefficient, D-c= 1/(pi(s)q(2)) for the slow mode decreases with temperature according to the Arhenius law until we reach the coexistence curve. Its value close to the coexistence is D-c=4 x 10(5) nm(2)/s and the activation energy in the homogeneous mixture is E-c = 127 kJ/mol. If we gradually undercool the mixture below the coexistence into the metastable two-phase region without inducing the phase separation we find unexpectedly that D-c does not change with temperature even 4degrees below the coexistence curve. The characteristic time of the fast mode does not depend on the scattering wave vector indicating that it is related to the transient gel structure. We have shown that it is possible to measure the short time relaxation of concentration fluctuations during the phase separation in the mixture. At low temperature close to the isotropic-nematic phase transition we have observed that the relaxation is well separated in time from the typical time of the domain growth. This relaxation mode is characterized by the large diffusion coefficient D = 2 x 10(8) nm(2)/s. The mode probably comes from the coupling between the orientational dynamics of liquid crystals and the transient gel structure of polymers. (C) 2004 American Institute of Physics.