Uniaxially oriented composites of high-density polyethylene and silver nanoparticles were prepared using solution-casting, melt-extrusion and solid-state drawing techniques. The absorption spectrum in the visible wavelength range of the drawn nanocomposites was observed to strongly depend on the polarization direction of the incident light. For instance, the nanocomposites appear bright yellow or red when the vibration direction of linearly polarized light is perpendicular or parallel, respectively, to the drawing axis. The optical anisotropy of the drawn nanocomposites originates from uniaxially oriented, pearl-necklace type of arrays of nanoparticles of high aspect ratios. The absorption spectrum of the nanocomposites can be shifted to higher wavelengths using appropriate annealing procedures. The annealing results in an increased size of the primary silver particles, due to Ostwald ripening, and consequently a range of polarization-dependent colors can be generated in the drawn nanocomposites. It is suggested that the drawn nanocomposite films can be used in liquid crystal displays (LCD's) were they serve a dual purpose in combining polarization filter and color filter. The new display configuration transmits colored light in both the on- and off-state of the device, this in contrast to a conventional color LCD which only transmits colored light in the off-state. As a consequence, an enhanced brightness and light (energy) efficiency of the new display set-up is envisioned.