We present a review of the electronic and non-electronic optical nonlineari
ties of nematic liquid crystals (NLC), and recently observed nonlinear opti
cal processes. In both the ordered and isotropic phases, NLCs exhibit large
optical nonlinearities with response times ranging from picoseconds to mil
liseconds. The fundamental principles underlying these nonlinearities, thei
r dynamics and practical application potential are discussed. Comparisons a
re made with other nonlinear optical materials currently being investigated
.