Dense assemblies of self-propelled particles that can form solid-like states also known as active or living glasses are abundant around us, covering a broad range of length scales and timescales: from the cytoplasm to tissues, from bacterial biofilms to vehicular traffic jams, and from Janus colloids to animal herds. Being structurally disordered as well as strongly out of equilibrium, these systems show fascinating dynamical and mechanical properties. Using extensive molecular dynamics simulation and a number of distinct dynamical and mechanical order parameters, we differentiate three dynamical steady states in a sheared model active glassy system: 1) a disordered state, 2) a propulsion-induced ordered state, and 3) a shear-induced ordered state. We supplement these observations with an analytical theory based on an effective single-particle Fokker–Planck description to rationalize the existence of the shear-induced orientational ordering behavior in an active glassy system without explicit aligning interactions of, for example, Vicsek type. This ordering phenomenon occurs in the large persistence time limit and is made possible only by the applied steady shear. Using a Fokker–Planck description with parameters that can be measured independently, we make testable predictions for the joint distribution of single-particle position and orientation. These predictions match well with the joint distribution measured from direct numerical simulation. Our results are of relevance for experiments exploring the rheological response of dense active colloids and jammed active granular matter systems.