Novel nonlinear optical materials, azlactone derivatives, have been intensively studied for second-harmonic generation (SHG). Some of these derivatives exhibit large powder SHG efficiency and sufficient transparency in the region of the second-harmonic of Nd:YAG laser radiation (0.532 mu m). In particular, the SHG efficiency of 4-(4’-methoxybenzylidene)-2-phenyloxazolin-5-one (MBPO) is found to be about 17 times that of urea. Single crystals of MBPO were prepared by dow evaporation from an acetone solution. These crystals belong to the orthorhombic system with a space group symmetry P2(1)2(1)2(1). The second-order molecular hyperpolarizability (beta) value of MBPO was determined to be 24.5 x 10(-30) esu by electric field induced SHG (EFISH) and is nearly equal to the reported beta value of 2-methyl-4-nitroaniline (MNA). A calculation of beta using the CNDO/S-CI method identifies the HOMO-LUMO transition moment as the dominent contribution to beta. Furthermore, the oriented gas model description shows that the beta component is aligned to yield the near maximum value possible in an MBPO crystal. The estimated d(14) value is 4.61 pm/V, which is on the same order as in potassium titanyl phosphate (KTP).