Photoswitches and dyes in the liquid-crystalline nematic phase have the potential for use in a wide range of applications. A large order parameter is desirable to maximize the change in properties induced by an external stimulus. A set of photochromic and nonphotochromic dyes were investigated for these applications. It was found that a bent-shaped 7-substituted dihydroazulene (DHA) photoswitch exhibited liquid-crystalline properties. Further investigation demonstrated that this material actually followed two distinct reaction pathways on heating, to a deactivated form by a 1,5-sigmatropic shift and to a linear 6-substituted DHA. In addition, elimination of hydrogen cyanide from the photoactive DHA gave both bent and linear azulene dyes. In a nematic host that has no absorbance around 350 nm, it was found that only the linear DHA derivative has nematic properties; however, both 6- and 7-substituted DHAs were found to have large order parameters. In the nematic host, ring opening of either DHA to the corresponding vinylheptafulvene resulted in a decrease in dichroic order parameter and an unusually fast back-reaction to a mixture of both DHAs. Likewise, only the linear azulene derivative showed mesomorphic properties. In the same nematic host, large order parameters were also observed for these dyes.