Multi‐aryl compounds, with conjugated backbones having electron donor and acceptor groups, are widely recognized for their significant nonlinearity. In this context, a new terphenyl compound, ethyl‐4″‐chloro‐5′‐hydroxy‐[1,1′:3′,1″‐terphenyl]‐4′‐carboxylate (EHCMT), has been synthesized for potential use as an optoelectronic material. Single crystal X‐ray diffraction (XRD) analysis of EHCMT revealed a triclinic system with the centrosymmetric space group , providing most accurate description for its crystal structure. The structure of compound was further elucidated through FTIR, NMR (1H, 13C & 2D‐HSQC), and UV–Visible spectroscopic techniques. Hirshfeld surface analysis was employed to examine the magnitude and significance of individual intermolecular interactions in the crystalline arrangement. The third‐order nonlinear optical (NLO) properties were investigated using the Z‐scan technique in a solution phase at 532 nm. The study revealed significant results, namely, nonlinear refraction value of −1.165 × 10−9 cm2 W−1, nonlinear absorption coefficient value of 13.4 × 10−5 cm W−1, and third‐order nonlinear susceptibility value of 0.50 × 10−7 esu. The structural parameters of experimental results were validated by comparing the same with quantum chemical calculations using hybrid functional, namely, Hartree–Fock ‐ Density functional theory (HF–DFT).