<p>Dynamical control of the optical nonlinear properties in solids – with light itself – will be essential for the development of ultrafast photonic technologies, including high-speed terahertz-rate data communication and advanced signal processing. Previously, methods for optically modulating nonlinear optical processes, such as second harmonic generation (SHG), have relied predominantly on non-resonant light-matter interaction or photo-generation of hot electrons in nanoscale materials. However, these approaches are typically constrained by limited interaction lengths and the initial frequency conversion is relatively weak under equilibrium conditions, making them impractical for devices that require high-contrast switching of strong signals. Here, modulation of a strong SHG signal in a bulk β-BaB₂O₄ (BBO) nonlinear optical crystal is achieved through resonant transient lattice deformation induced by intense terahertz (THz) pulses tuned to a specific infrared-active phonon mode. Selective lattice excitation results in an unprecedented ~30% modulation of the SHG in BBO. In contrast to past efforts employing non-resonant THz interaction, this effect cannot be explained by modulation of the nonlinear susceptibility – a 𝜒(3)-effect. But rather – through polarization-resolved measurements, ab initio calculations, and analytical modelling –the SHG modulation is found to be driven by THz-induced phonon dynamics that affect the nonlinear optical phase-matching conditions through a 𝜒(2) process. This resonant all-optical control mechanism points toward new optical control schemes, based on selected lattice degrees of freedom, to dynamically tune the overall nonlinear optical response in bulk materials. Such schemes may find practical applications in ultrafast optoelectronics and integrated photonics.</p>