The molecular and solid state nonlinear optical (NLO) properties of several (phenylazo)-azulenes are investigated. In particular, (4-nitrophenylazo)-azulene (2b) exhibits a quadratic hyperpolarizability (beta(vec)) of 80 x 10(-30) cm5esu recorded at 1.907 microm by the electric field-induced second-harmonic (EFISH) technique. This molecular material, which crystallizes in the monoclinic noncentrosymmetric space group Pc, exhibits an efficiency 420 times that of urea in second-harmonic generation. The origin of the optical nonlinearity in azo-azulene is discussed in relation with crystal structures and semiempirical calculations within the INDO/SOS formalism, and compared with that of the well known disperse red one (DR1) organic dye.