Shear-induced orientation of nanoparticles in poly(ethylene oxide)/Laponite RD hydrogels has been investigated by small angle neutron scattering (SANS). As temperature is reduced, anisotropy develops at lower shear rates. The two-correlation length Debye-Anderson-Brumberger (DAB) model provides a good fit to the experimental data. The deduced short-range correlation length (approximate to 5 nm) is observed to increase with shear. The long-range correlation length (approximate to 50 nm) shows a strong directional dependence, and decreases when shear is applied. The relative contribution of long-range order to the SANS intensity is observed to increase with shear and decrease with temperature.