A flexible regular tetrafunctional polymer network containing a low molecular liquid crystal (LC) solvent was simulated with molecular dynamics. The LC solvent comprises of anisotropic rod-like semi-flexible linear molecules composed of beads bonded by a FENE potential. Flexibility was induced by a bending potential proportional to the cosine of the angle between neighbouring valence bonds. All interactions between non-bonded beads are described by the repulsive part of the Lennard-Jones potential. The average length of the network chain was chosen to be close to the length of a mesogen. The number of network cells was constant and the simulated systems differ from each other by the number of LC layers. The simulations of a system of flexible polymer chains in a low molecular LC solvent and a system of pure low molecular LC solvent were also carried out. Increasing the density of the composite system the LC solvent experiences the same phase transition as the pure LC: isotropic, nematic and smectic. The presence of the network shifts the isotropic-nematic transition to higher densities but does not significantly change the position of nematic-sinectic transition. Transition of the LC solvent into the smectic state changes the morphology of the network. The periodicity of LC phase determines the number of network layers. The presence of linear chains in the LC solvent decreases the number of LC layers in the sinectic phase. The LC order induces some stretching of the network chains along the direction of orientation and at the same time causes shrinkage in the perpendicular direction especially in the smectic phase. (C) 2004 Elsevier Ltd. All rights reserved.