Second-order nonlinear optical processes including second-harmonic generation, optical rectification, and difference-frequency generation associated with intersubband transitions in wurtzite GaN/AlGaN quantum well (QW) are investigated theoretically. Taking into account the strain-induced piezoelectric (PZ) effects, we solve the electronic structure of the QW from coupled effective-mass Schrödinger equation and Poisson equation including the exchange-correlation effect under the local-density approximation. We show that the large PZ field in the QW breaks the symmetry of the confinement potential profile and leads to large second-order susceptibilities. We also show that the interband optical pump-induced electron-hole plasma results in an enhancement in the maximum value of the nonlinear coefficients and a redshift of the peak position in the nonlinear optical spectrum. By use of the difference-frequency generation, THz radiation can be generated from a GaN/Al0.75Ga0.25N with a pump laser of 1.55 μm.