A rheo-optic study of the formation kinetics of the multilamellar vesicle (MLV) structure in the AOT/brine system is reported. Controlled shear rate rheology and flow dichroism are used to identify a critical shear stress below which MLVs are formed and above which a transition to a biphasic state occurs. Controlled stress rheology with in situ flow small-angle light scattering shows that MLV formation occurs at a critical strain that is signaled by shear-thickening behavior and small-angle scattering typical of spherulites. Further, the applied shear stress controls both the MLV formation rate and the final MLV size. At high stresses shear-induced ordering of the MLVs is observed, similar to that seen in colloidal suspensions, as well as a transition to a biphasic state. The results are used to reinterpret previously published" nonequilibrium phase diagrams" and to test scaling models for the MLV size in the pure MLV phase.