The macromolecular alignment and texture orientation in sheared thermotropic copolyester were investigated using in situ wide-angle X-ray scattering (WAXS) and polarizing optical microscopy (POM). The molecular behavior was correlated with viscoelastic properties. The polymer is a random copolyester based on 60 mol% 1,4-hydroxybenzoic acid (B) and 40 mol% ethylene terephthalate (ET) units. X-ray scattering showed that the molecular chains were aligned along the flow direction. The degree of molecular orientation, < P-2 >, is an increasing function of the applied shear rate. However, rheo-optics showed that shear flow could not orient the polydomain texture, i.e., neither defect stretching nor elimination of defects was observed. Instead, shear compressed the microdomains and gave rise to long-range orientation correlations. Rheology showed that the nematic melt is viscoelastic, the loss modulus G '' dominates the elastic modulus G', and the dynamic viscosity eta* is shear thinning. Moreover, the steady shear viscosity, eta, also behaved shear thinning, while the first normal stress difference N (1) remained positive. The empirical Cox-Merz rule did not hold, eta* > eta, within the shear rate range studied. The microscopic and rheological properties suggest that B-ET is a flow-aligning nematic polymer.