Intercalated layered materials comprising an organic dye and inorganic MPS(3) [where M is either the manganese ion (Mn(2+)) or the cadmium ion (Cd(2+))] phases have been prepared. The intercalation process induces a spontaneous poling, giving rise to an efficiency of 750 times that of urea in second-harmonic generation for the cadmium derivative. In addition, the manganese derivative displays a permanent magnetization below 40 kelvin. Thus, these materials exhibit both a large optical nonlinearity and magnetic ordering.