A novel heterocyclic compound named (Z)-5-(4-nitrobenzylidene)-3-N(3-chlorophenyl)-2-thioxothiazolidin-4-one (NCTh) was synthesized and analyzed using various techniques, including single crystal X-ray diffraction, FT-IR, UV-Vis, NMR spectroscopy, and mass spectral data methods. NCTh was observed to crystallize in the triclinic crystal system P-1 space group. To validate the experimental findings, density functional theory (DFT) calculations were performed using the B3LYP functional with the 6-311 G(d,p) basis set. The results indicated good agreement in geometrical parameters between the experimental and theoretical outcomes. The study also calculated HOMO-LUMO energies, molecular electrostatic potential (MEP), and global chemical reactivity descriptors to evaluate the compound’s reactivity. Additionally, the study conducted reduced density gradient and Hirshfeld surface analyses to reveal attractive, repulsive, and van der Waals strong and weak interactions. The calculation of thermodynamic parameters was also included. The study focused on investigating the nonlinear optical (NLO) properties of NCTh, which were characterized through key parameters such as the electric dipole moment (µ), polarizability (α), first-order hyperpolarizability (β), and second-order hyperpolarizability (γ). These properties provide insights into the material’s potential applications in optical and photonic technologies. Additionally, a molecular docking study was performed to further explore the structure-activity relationship, particularly in a biological context. The docking results revealed a strong ligand-protein interaction, with a binding energy of −10.3 kcal/mol, indicating significant affinity. Moreover, the inhibition constant (Ki) was calculated to be 0.0281 μM, suggesting a highly potent interaction, which could be relevant for drug design or biochemical applications.