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A nematic-to-isotropic transition has been observed in suspensions of carbon nanotubes (CNTs) and a cyanobiphenyl-based liquid crystal (LC) confined within an indium tin oxide glass sandwich cell. Upon the application of electric field, CNTs rotate out of plane short-circuiting the electrodes and producing a current flow through the CNTs. The resulting Joule heating leads to a local increase in temperature of the LC-CNT medium. Hence, starting from a metastable nematic phase, a complete transition to the isotropic phase is observed. On removal of the electric field, the transition is reversed with the LC-CNT medium returning to the nematic phase.