The microstructure of a thermotropic liquid crystalline polymer (TLCP, Vectran V400 P) was investigated in the presence of vapor-grown carbon nanofibers. Percolation threshold was observed at similar to 5 wt% carbon nanofibers. During processing, strong flows resulted in severe anisotropy of the semirigid rod-like TLCP molecules. For a given type of flow, however, the nanofibers were found to reduce the overall anisotropy of the TLCP nematic phase in the nanocomposite. We believe that nanofibers provide surface anchoring for the nematic phase that helps disrupt the high degree of molecular order in the TLCP matrix and reduces its anisotropy in the nanocomposite. (c) 2005 Elsevier Ltd. All rights reserved.