Abstract Treatment of liquid crystal has important significance for the environment protection and human health. This study proposed a hydrothermal process to decompose the liquid crystal of 4-octoxy-4′-cyanobiphenyl. Experiments were conducted with a 5.7mL stainless tube reactor and heated by a salt-bath. Factors affecting the decomposition rate of 4-octoxy-4′-cyanobiphenyl were evaluated with HPLC. The decomposed liquid products were characterized by GC-MS. Under optimized conditions i.e., 0.2mL H2O2 supply, pH value 6, temperature 275°C and reaction time 5min, 97.6% of 4-octoxy-4′-cyanobiphenyl was decomposed into simple and environment-friendly products. Based on the mechanism analysis and products characterization, a possible hydrothermal decomposition pathway was proposed. The results indicate that hydrothermal technology is a promising choice for liquid crystal treatment.