When amorphous poly(ethylene-2,6-naphthalate) (PEN) sheets are stretched between the glass transition temperature and the cold crystallization temperature, they exhibit necking. The occurrence of this unusual neck formation above the glass transition temperature causes large local fluctuations in the thickness of samples. However, uniformity of sample thickness can be re-established when the films are stretched beyond the critical strain at which stress hardening due to crystallization starts to occur. To elucidate the mechanism of neck formation in films stretched up to 20-30 degrees C above the glass transition temperature, a series of samples were prepared under selected conditions and were sliced in the machine direction-normal direction (MD-ND) plane. The structural variations along the necked region were analysed using optical retardation, infra-red dichroism and micro-beam X-ray diffraction techniques. The results obtained from these techniques indicate that, during the course of deformation, the naphthalene groups, which are large and highly planar, rapidly align their broad faces parallel to the surface of the flat him. This behaviour resembles a disorder-nematic order transition and occurs at highly localized regions in the sample, thereby manifesting itself macroscopically as a neck. The free-width uniaxially stretched films were found to exhibit uniplanar axial texture instead of the expected transverse isotropy as a result of this preferential orientation of the naphthalene planes.