We present evidence of reversible optical control of the third-order molecular hyperpolarizability (γ) of nonlinear optical (NLO) azo chromophore. We show that optically-induced molecular shape change of the NLO dye from the trans to the cis form, by means of photoisomerization which occurs within the picosecond time scale, breaks γ down rapidly. The anharmonic movement of the electronic cloud of the NLO dye in strong optical field is “blown out” upon optical exitation of the azo chromophores. We show that γ recovers its initial value upon thermal back-isomerization of the dye to the trans form. This change in γ can be optically-cycled many times, leading to a novel all-optical light modulation phenomenon. The light polarization and molecular reorientation do not influence this all-optical switching of γ. We develop a theoretical model that considers a molecular density resulting from an intensity-dependent balance between two molecular species with different molecular third-order hyperpolarizabilities im...