The optical properties of CdS nanorods have been modified in presence of antiferroelectric liquid crystals (AFLC). The effective refractive index of the CdS nanorods has been increased from 2.468 to 2.499 due to presence of AFLC molecules. The change in optical band gap of the CdS nanorods dispersed in AFLC causes the increment of refractive index of the CdS nanorods. The optical band gap of the CdS nanorods has been shifted from 2.61 eV to 2.52 eV due to presence of AFLC. We have also observed the enhanced photoluminescence (PL) intensity and red shift in emissive energy band of CdS nanorods dispersed in AFLC.