Flow-induced structures in suspensions containing spheres in viscoelastic suspending media were investigated by microscopy and rheo-optical methods. Suspensions of monodisperse polystyrene spheres with diameters ranging from 1.2 to 2.8 mu m and dispersed in aqueous solutions of hydroxypropylcellulose were studied in simple shear flows. Optical microscopy observations as well as small-angle light-scattering (SALS) experiments were performed using a parallel plate geometry. In agreement with previous work, necklaces of particles aligned in the flow direction were observed when shearing faster then a critical shear rate, which was found to be independent of particle size. In contrast to earlier work, however, the role of particle migration was found to be of prime importance. Particles were shown to migrate toward the plates where the particles assembled and aligned in strings running in the flow direction. For the smallest particles (1 mu m diameter), the formation of particle doublets or short strings along the vorticity direction was observed at low shear rates, which flipped to an orientation into the flow direction and grew into longer strings at higher shear rates. SALS experiments were used to quantify the degree of alignment and its dependence on particle size, shear rate, and gap. For the system under investigation, the degree of alignment was found to increase with increasing shear rate and particle size and with decreasing gap. The present results suggest that, depending on the details of the suspending medium and the size and nature of the suspended particles, the formation of aligned structures is affected by the relative magnitude of the colloidal and hydrodynamic forces and the kinetics of string formation versus the kinetics of migration.