We propose a novel and high-performance directional-coupler polarization splitter using nematic liquid crystal (NLC) as the coupling layer. The beam propagation method is used to investigate the propagation characteristics of the device under various conditions. Results of the numerical calculation relevant to the design conditions are presented. Because of the large birefringence of NLC, a very short device length of 140 mu m is achievable at a high extinction ratio of 28 dB.