The main subjects of the paper are the methodology of characterizing liquid crystal displays (LCDs) and the properties of a three-million-pixel monochrome display system. The system is characterized by display function and dynamic range as a function of viewing angle, spatial luminance uniformity, flicker, peak-to-peak temporal modulation transfer, spatial modulation transfer function (MTF), spatial noise power spectra, and single-pixel signal-to-noise ratios. The evaluated LCD has image quality that, in most respects, is superior to CRT monitors of comparable addressable pixel matrix. In particular, the LCD has perfect spatial modulation transfer. For the evaluated monochrome display system, the general limitation of liquid crystal display (LCD) drivers to 8-bits of grayscale precision is overcome by spatial as well as temporal modulation techniques. The architecture of the control electronics of the system is presented, and as part of it, the implementation of the modulation techniques. The spatial or a combination of spatial and temporal modulation techniques increases the precision with which luminance levels can be defined to 9.58 or 11.58 bits, respectively. The conformance of the calibrated display with the DICOM Standard Display Function is demonstrated without and with application of the modulation techniques. Excellent conformance is achieved for the combination of spatial and temporal modulation.