A new ultraviolet nonlinear optical material, namely LiHgPO4, was synthesized using the mild hydrothermal method. The structure of LiHgPO4 features novel double layers constructed by severely distorted HgO6 octahedra and PO4 tetrahedra, which are further interconnected by LiO, tetrahedra to form a three-dimensional structure. LiHgPO4 exhibits a very strong second harmonic generation (SHG) response of 11.0 times that of KH2PO4 and a relatively large birefringence (0.068 at 1064 nm) among the reported SHG-active phosphates. Theoretical calculations revealed that the introduction of the Hg2+ in a highly distorted HgO6 octahedral geometry is crucial to produce the strong SHG response and large birefringence.