A new principal mechanism underlying real-time holographic grating recording in a thin cell filled with a nematic liquid crystal doped with a dye is proposed. In the experiment a laser light interference pattern is mapped in the form of a spatial modulation of index of refraction. This is achieved by respective modulation of an electric field in the vicinity of the nematic liquid crystal due to its bulk photoconductivity and subsequent space charge field formation. In the spatially modulated electric field the nematic director is locally reoriented to some degree, leading to the appearance of a phase An grating due to the birefringent properties of a nematic. The externally applied electric field plays an important role in the whole process: it changes the initial planar alignment of liquid crystal molecules and enhances the photogeneration quantum yield. The role of electrical edge conditions in the cell is pointed out as they determine the field distribution in the liquid crystal, which is generally different from the space charge field distribution described for photorefractive materials. KEYWORDS nematic liquid crystals; self-diffraction; optical recording of gratings; real-time holography; molecular reorientations in dye-doped liquid crystals