In the steady state flow of many liquids, such as polymer solutions and melts, the first normal stress difference, N-1 = sigma(11) - sigma(22), is positive. However, with liquid crystal systems and some colloidal suspensions, negative values of N-1 were reported in literature. In our past work with a commercial polyvinyl chloride plastisol, negative values were observed. During the steady state flow, the plastisol undergoes stress-induced phase separation into an immobilized layer and a mobile phase. The concentration difference between the two phases gives a rise to an osmotic pressure difference, Delta(pi), which is countered by a normal stress, N, generated by the flow. Because N is balanced with Delta(pi), N cannot be observed directly. In this work, N is identified as an isotropic and N-1, directional. The disturbance among rotating particles in the mobile phase produces two effects; one is an increase of pressure, which is N; the other, N, is associated with a small volume increase, which is directed towards the opening of the rheometer. The directional expansion is caused by the shearstress gradient in the liquid between the rotating particles. (c) 2006 Wiley Periodicals, Inc.