A series of liquid junction dye-sensitized solar cells (DSCs) was fabricated based on polymer membrane-encapsulated dye-sensitized TiO2 nanoparticles, prepared using a surface-induced cross-linking polymerization reaction, to investigate the dependence of the solar cell performance on the encapsulating membrane layer thickness. The ion conductivity decreased as the membrane thickness increased; however, the long term-stability of the devices improved with increasing membrane thickness. Nanoparticles encapsulated in a thick membrane (ca. 37 nm), obtained using a 90 min polymerization time, exhibited excellent pore filling among TiO2 particles. This nanoparticle layer was used to fabricate a thin-layered, quasi-solid state DSC. The thick membrane prevented short-circuit paths from forming between the counter and the TiO2 electrode, thereby reducing the minimum necessary electrode separation distance. The quasi-solid state DSC yielded a high power conversion efficiency (7.6 → 8.1%) and excellent stability during heating at 65 °C over 30 days. These performance characteristics were superior to those obtained from a conventional DSC (7.5 → 3.5%) prepared using a TiO2 active layer with the same thickness. The reduced electrode separation distance shortened the charge transport pathways, which compensated for the reduced ion conductivity in the polymer gel electrolyte. Excellent pore filling on the TiO2 particles minimized the exposure of the dye to the liquid and reduced dye detachment.