Because the optically induced second harmonic generation (SHG) is prevented by symmetry in a centrosymmetric material, one needs to form noncentrosymmetric processes in order to observe the SHG. However, one of the efficient ways to enhance the noncentrosymmetricity of amaterial is to dope it with an appropriate impurity and amount. We grow Cu-doped CdI2 layered nanocrystal structures from themixture of CdI2 and CuI using the standard Bridgman-Stockbarger method and investigate the nano-confined effects by studying the second-order optical effect via the measurements of SHG. The second-order susceptibility for the nanocrystals is calculated and the values at liquid helium temperature range from 0.38 to 0.83 pm V (1) for the thicknesses of 10-0.8 nm respectively. The size dependence demonstrates the nano-sized quantum-confined effect with a clear increase in the SHG with decreasing the thickness of the nanocrystal or crystal temperature. Since the local electron-phonon anharmonicity is described by third-order rank tensors in disordered systems, the SHG is very similar to that one introduced for the third-order optical susceptibility. It has been confirmed by observing the large photoluminescent yield of the pure crystals. The Raman scattering spectra taken for thin nanocrystals confirm the phonon modes originating from interlayer phonons crucially responsible for the observed effects. The obtained results show that the Cu-doped CdI2 layered nanocrystals are promising materials for applications in optoelectronic nano-devices. (C) 2009 Elsevier B.V. All rights reserved.