A liquid crystal device which has a first and second electrodes formed on a second substrate and which controls allows alignment of liquid crystal molecules by an electric field generated between the first and second electrodes, wherein the liquid crystal molecules in the liquid crystal layer are aligned in a first direction in a plane of the substrate, wherein a phase difference layer having molecules, which are inclined in the plane of the first or second substrate and are aligned in directions different from one another in the transmissive display portion and the reflective display portion, is formed on a surface of the first or second substrate opposed to the liquid crystal layer, and wherein a director of the molecules of the phase difference layer is aligned in a second direction parallel to the first direction at least in the plane of the transmissive display portion, wherein an angle formed by the alignment direction of the molecules of the phase difference layer in the transmissive display portion and the alignment direction of the molecules of the phase difference layer in the reflective display portion is about 67.5°.