In this article, we disclose a method to achieve submicron-scale resolution for liquid crystals by photo-alignment of the sulfonic azo dye (SD1) layer. The interference pattern produced by Lloyd's mirror has been used to produce two alignment domains. The easy axes in these alignment domains are mutually perpendicular to each other, in the plane of the substrate. The two-step alignment process, i.e. the first uniform alignment and the second alignment by interference pattern, provides resolution up to 105 nm for the liquid crystal alignment domain size that typically corresponds to the existing experimental limits. Optical methods such as optical microscopy and diffraction in the transmissive and reflective regimes have been used to analyze the fabricated gratings.