Functionalized nanoparticles have a wide range of applications in liquid crystal systems, including displays, photovoltaics, and drug delivery. We need to understand the interactions between the nanoparticles and the liquid crystal molecules in order to utilize them fully and safely. We investigate the short-range interaction of coated nanoparticles with a liquid crystal membrane or bulk sample through the use of atomic force microscopy (AFM) and X-ray scattering techniques. We identify the role the functionalization plays in the phase behavior of the liquid crystal both as a thin film and in bulk. Our research produced three results. We identify differing behavior in thin film samples of liquid crystal and coated nanoparticles dependent upon particle functionalization using AFM. Using X-ray scattering we measure the alignment and smectic layer formation in the presence of coated nanoparticles, even above the smectic-A to nematic transition temperature. We find evidence of a "halo" that forms around coated nanoparticles, particularly with longer coating molecules.