This study focuses on the impact of substitutional positions on the nonlinear optical (NLO) and photophysical properties of four novel chalcone derivatives (I–IV). The grown crystals were characterized using FT-IR, NMR and single crystal X-ray diffraction (SCXRD) techniques, and the intermolecular interactions were studied by examining the unique packing motifs. The linear and 3rd-order NLO properties were experimentally determined using UV–Vis spectrometer and Z-scan setup with 637 nm continuous wave excitation, respectively. Compounds I–IV were studied theoretically using density functional theory (DFT) to support the experimental results. B3LYP functional was used to optimize the geometries, and the molecular properties of the compounds were determined via molecular electrostatic potential (MEP), natural population analysis (NPA), and localized orbital locator-π (LOL-π) analyze. The photophysical properties were analyzed using time-dependent DFT (TDDFT) using both CAM-B3LYP and B3LYP functionals to investigate the impact of the long-range correction. Inter-fragment charge transfer (IFCT) analysis and hole-electron analysis were employed to examine the linear optical properties and charge transfer mechanism. The NLO properties such as dipole moment (μ), polarizability (α), first and second hyperpolarizabilities (β and γ) were examined with the numerically differentiate analytic method using both functionals. Z-scan NLO data shows that the nonlinear refraction (NLR) coefficient of I–IV is significantly influenced by intermolecular interactions, specifically aggregation phenomena. Compound IV exhibits an exceptional nonlinear absorption (NLA) response and superior optical limiting properties compared to others attributed to its para-substituted strong electron-acceptor group (CF3) which results in highest transition dipole moment, lowest excitation energy, and well-defined charge transfer processes within its molecule. As a result, this suggests that it could be a potential candidate for NLO applications.