Molecular dynamical simulation has been carried out to investigate the structure and dynamics of a dipolar fluid under strong shear. Dipolar fluid consists of polarizable particles, which have an induced dipole moment in the applied field direction. Shear stress is perpendicular to the field direction. When shear stress is small, the flow has a flowing-chain structure. If shear stress increases to pass a critical value, flowing-chain structure changes to flowing layer structure. Each layer is parallel to the flow direction and shear direction. Within one layer, particles form strings in the flow direction. (c) 2005 Elsevier Ltd. All rights reserved.