Second harmonic generation(SHG) and the first hyperpolarizability (βijk) of two novel quaternary diamond-like semiconductors, Li2CdGeS4 and Li2CdSnS4, are investigated based on the band structure calculations. Calculations show that these materials possess wide and direct energy gaps of about 3.10 eV (Li2CdGeS4) and 3.23 eV (Li2CdSnS4) in close agreement with the measured gaps (3.15 eV and 3.26 eV). The energy gap values confirm that these materials exhibit exceptional laser damage thresholds. The presence of polarizable M-S bonds tunes these compounds to exhibit strong SHG. The calculated linear optical properties exhibit considerable anisotropy, which favors the enhanced phase matching conditions necessary for observation of SHG and optical parametric oscillation. It has been found that Li2CdGeS4 and Li2CdSnS4 exhibit negative uniaxial anisotropy and positive birefringence. The calculated SHG of the dominant component is about 18.64 pm/V for Li2CdGeS4, which is larger than that obtained from Li2CdSnS4 (12.75 pm/V). These results are in concordance with the experimental value of the well known nonlinear crystal KTiOPO4. The calculated first hyperpolarizability (β333) at λ = 1064 nm is about 13.015 × 10−30 esu for Li2CdGeS4 and 9.704 × 10−30 esu for Li2CdSnS4.