We report a combined shear small-angle neutron scattering (shear-SANS) and rheo-optical study of dilute aqueous suspensions of SWNT bundles dispersed using ionic surfactants. Both shear-SANS and flow birefringence reveal weak shear-induced alignment of SWNT bundles along the direction of flow. In terms of a nematic order parameter, the degree of alignment is found to increase with the shear rate, reaching ca. 0.08 at 2000 s(-1). Addition of a soluble polymer to the SWNT suspensions diminishes shear-induced alignment. The factors limiting shear alignment in dilute SWNT suspensions are discussed. (c) 2005 Elsevier B.V. All rights reserved.