We report on thermally irreversible hydrogels made from un-cross-linked hydrophobically modified (hydroxyethyl)cellulose in solution with sodium dodecyl sulfate (SDS). The effects of temperature and shear history on bulk and microstructural properties of these gels were investigated over a temperature range 25-70°C. The bulk properties investigated were composition, gel volume, and dynamic storage and loss moduli. Microstructural properties of the networks were investigated using two spectroscopic probes, pyrene and ET(30), which gave complementary information about the packing density and surface hydrophobicity, respectively, of the hydrophobic microdomains in the gels. The hydrogels exhibit an irreversible transition in both their bulk properties and the structure of the microdomains at a temperature in the range 35-50°C. Below the transition, thermal gelation is observed as the polymer chains expand with temperature and SDS is driven to associate with the side chains. Above the transition temperature the gels collapse, and the dynamic storage modulus of the gels goes down. At the same time the hydrophobic microdomains become increasingly porous. A mechanism for these changes is proposed, and the properties of these materials are contrasted with those of other temperature-sensitive hydrogels.