The 850-nm vertical-cavity surface-emitting laser (VCSEL) with liquid crystal overlay is presented utilizing the birefringence of nematic liquid crystal. Threshold current, peak of optical power and I-P characteristics at different temperatures were studied. At 293 K, the current between the first polarization hop and the second one has an increase of 2.2 mA after overlaying the liquid crystal. At 313 K and 3 mA, the optical power difference between the two orthogonally polarized lights increases from 133.6 to 248.8 μW. The experimental results show that the nematic liquid crystal enlarges the stable range and the discrete of optical power of orthogonally polarized state. Our research could provide insight into the design and fabrication of VCSEL with stable polarization at high temperatures.