The directors are randomly distributed in polydomain liquid crystal elastomers (LCEs), which can be rearranged upon external loading. This can further lead to a polydomain-monodomain transition, accompanied by a change from an opaque state to a fully transparent state. Currently, the mechanical response and the related phase transition in polydomain LCEs are typically characterized in uniaxial loading conditions. In this work, we employ inflation tests to investigate the complex behaviors of polydomain LCEs under biaxial stress states. Three types of polydomain LCEs were synthesized. The uniaxial tension tests show that the stress–strain curves for all LCEs exhibit a soft stress plateau, followed by a pronounced stress increase with deformation. However, the hardening modulus and the failure stretch ratio differ considerably, leading to distinct responses during inflation processes. For the softest LCEs, a clear snap-through type behavior is observed, while the membrane of the stiffest LCEs fails before reaching the peak pressure value. For the moderately stiff LCEs, the pressure first increases, then reaches a plateau region, and shows a significant increase again. It is further observed that the polydomain-monodomain transition initiates in the bottom part of the membrane balloon and transits to the whole region. For the theoretical aspects, the constitutive relationship of polydomain LCEs is developed through introducing the state variables into the free energy. A numerical model is further constructed to simulate the boundary value problem of inflation tests. The model together with parameters calibrated from the uniaxial tension tests is able to fully capture the response in inflation tests. We also show that the classic hyperelastic models fail to capture the inflation behaviors of polydomain LCE membranes.