Integration of molecular liquid crystals (LCs) with functional proteins can provide new class of materials for potential applications in optical biosensing. However, hydrophobic nematic LCs (length ∼ 1-2 nm) and hydrophilic proteins, size ∼ O (nm), do not intermix without chemical modification of at least one of them. Bioconjugation of proteins with a polyethylene glycol-based polymeric surfactant (PS) can provide a core-shell system that is sequestered within nonaqueous LC (4-cyano-4'-pentylbiphenyl) microdroplets. However, the nature of interactions between the components and detailed understanding of the resultant hybrid microstructure remains unclear. Here, using a combination of isothermal titration calorimetry (ITC), fluorescence microscopy, and infrared-imaging spectroscopy, we show that strong hydrophobic interactions between the LC and PS drives the sequestration of a myoglobin-PS (Mb-PS; dispersed in the aqueous phase) into the LC spherical microdroplets or even into a bulk LC phase. The average values of both, the binding constant and the standard molar enthalpy change, are increased by approximately a factor of 2.5 times when the unmodified Mb is conjugated to the PS. Small-angle X-ray scattering studies reveal that LC molecules act as a solvent for the Mb-PS conjugate; furthermore, the LC long-range order is disturbed due to mixing, as exemplified by the change in its coherence length from 8.9 to 5.7 nm. Detailed all-atomistic molecular dynamic simulations for a three-component PS-water-LC system show a change in interaction energy of -144 kJ mol-1 PS-1 upon the contact of PS chains (initially dispersed in water) with LC and agree with the ITC experiments.