A direct rheo-optical characterization of the flow-induced isotropic-nematic (I-N) transition in a semiflexible thermotropic liquid-crystalline polymer (TLCP) was investigated, using a specially constructed apparatus enabling in-situ optical microscopic observations at elevated temperatures, along with cone-and-plate rheometry. For the investigation, an aromatic polyester, poly[(phenylenesulfonyl)p-phenylene 1,10-decamethylenebis(4-oxybenzoate)] (PSHQ10),was synthesized via solution polymerization. Above the equilibrium isotropic-nematic transition temperature for this polymer, T = 170.5 degrees C, application of steady-state shear flow above a certain critical value of shear rate, (gamma)over dot(c), produces a first-order I-N transition, with (gamma)over dot(c) increasing with temperature. This transition is evidenced by the formation of elongated nematic (birefringent) domains in the isotropic matrix, accompanied by a drastic decrease in shear viscosity(eta). Remarkably, the nematic domains that form for (gamma)over dot > (gamma)over dot(c) are optically uniform under cross-polarized optical microscopy; i.e., they are apparently free of disclinations (defects), typical of textured TLCPs. The flow-induced I-N transition in PSHQ10 is found to be reversible; i.e., upon cessation of shear flow, the domains melt to the original isotropic phase and the dynamic moduli rise toward the pretransition values. The observed flow-induced I-N transition may find important applications, such as envisaging new routes for processing TLCPs with better mechanical properties and helping to understand bioprocesses such as silk thread spinning.