A novel liquid crystal on silicon (LCOS)-based wavelength selective switch (WSS) is proposed, fabricated, and demonstrated. It employs a multilayered arrayed waveguide grating (AWG) as a wavelength multiplex/demultiplexer. The LCOS deflects spectrally decomposed beams channel by channel and switches them to desired waveguide layers of the multilayered AWG. In order to obtain the multilayered AWG with high yield, phase errors of the AWG is externally compensated for by an additional phase modulation with the LCOS. This additional phase modulation is applied to the equivalent image of the facet of the AWG, which is projected by a relay lens. In our previously-reported WSS configuration, somewhat large footprint and increased cost were the drawbacks, since two LCOSs were required: one LCOS was driven for the inter-port switching operation, and the other was for the phase-error compensation. In the newly proposed configuration, on the other hand, both switching and compensation operations are performed using a single LCOS. This reduction of the component count is realized by introducing the folded configuration with a reflector. The volume of the WSS optics is 80 × 100 × 60 mm3, which is approximately 40% smaller than the previous configuration. The polarization-dependent loss and inter-channel crosstalk are less than 1.5 dB and -21.0 dB, respectively. An error-free transmission of 40-Gbit/s NRZ-OOK signal through the WSS is successfully demonstrated.