The　second-order　nonlinear-polarization　originated　from　the　interaction　between　thin-film　materials　with　second-order　nonlinear　susceptibility　(χ　(2))　and　high-power　laser　is　essential　for　integrated　optics　and　photonics.　In　this　work,　strong　second-order　nonlinear-polarization　was　found　in　a-axis　oriented　Zn1-xMg　x　O　(ZnMgO)　epitaxial　thin-films　with　Li　incorporation,　which　were　deposited　by　radio-frequency　magnetron　sputtering.　Mg　incorporation　(x　＞　0.3)　causes　a　sharp　fall　in　the　matrix　element　χ　33　of　χ　(2)　tensor,　although　it　widens　optical　bandgap　(E　opt).　In　contrast,　moderate　Li　incorporation　significantly　improves　χ　33　and　resistance　to　high-power　laser　pulses　with　a　little　influence　on　E　opt.　In　particular,　a　Zn0.67Mg0.33O:Li　[Li/(Zn　+　Mg　+　Li)　=　0.07]　thin-film　shows　a　|χ　33|　of　36.1　pm　V−1　under　a　peak　power　density　(E　p)　of　81.2　GW　cm−2,　a　resistance　to　laser　pulses　with　E　p　of　up　to　124.9　GW　cm−2,　and　an　E　opt　of　3.95　eV.　Compared　to　that　of　ZnO,　these　parameters　increase　by　37.8%,　53.4%,　and　18.6%,　respectively.　Specially,　the　Zn0.67Mg0.33O:Li　shows　higher　radiation　resistance　than　a　Mg-doped　LiNbO3　crystal　with　a　comparable　E　opt.　First-principle　calculations　reveal　the　Li　occupation　at　octahedral　interstitial　sites　of　wurtzite　ZnO　enhances　radiation　resistance　by　improving　structural　stability.　X-ray　photoelectron　spectroscopy　characterizations　suggest　moderate　Li　incorporation　increases　χ　33　via　enhancing　electronic　polarization.　These　findings　uncover　the　close　relationship　between　the　octahedra　interstitial　defects　in　wurtzite　ZnMgO　and　its　nonlinear-polarization　behavior　under　the　optical　frequency　electric　field　of　high-power　laser.　©　2024　IOP　Publishing　Ltd.