Monolayer transition metal dichalcogenides (TMDCs) have large second‐order optical nonlinearity owing to broken inversion symmetry in two‐dimensional (2D) crystals. However, despite the strong light–matter coupling in monolayer TMDCs, their nonlinear responses are ultimately limited by subnanometer thickness. Here, a dramatic enhancement of the second‐harmonic generation (SHG) is achieved from monolayer tungsten disulfide (WS2) incorporated onto a 2D silver (Ag) nanogroove grating with subwavelength pitch. By tuning surface plasmon mode and second‐harmonic frequency in resonance with the C exciton in WS2, a large SHG enhancement factor (≈400) and a large conversion efficiency (≈2.0 × 10–5) can be obtained. Furthermore, the azimuthal angle dependence of polarized SHG from monolayer WS2 can be manipulated by the nanogroove plasmonic mode. Based on this property, a polarization‐modulated optical encoding technique is demonstrated. The results suggest that 2D TMDC–plasmonic hybrid metasurface structures can provide an ideal integration platform for on‐chip nonlinear photonics and plasmonics.