Aluminum-doped zinc oxide (AZO) layers are prepared by using atomic layer deposition technique. The obtained layers possess high optical transmittance at visible and near-infrared spectral range. By varying the Al content, optimal growth compositions of AZO are established where the electrical conductivity of the film is highest. Based on performed optical and electrical characteristics measurements, selected AZO films with optimal conductivity are implemented as transparent electrodes in liquid crystal display devices. The electro-optical modulation characteristics of these devices are found to be comparable to those of devices using commercial ITO electrodes.