The results of theoretical and experimental studies of effects in the interaction of powerful laser radiation with liquid crystals (LC) are reviewed. Attention is drawn to two aspects of these studies: 1) use of LC materials in nonlinear optical devices (specifically, the nonlinear optics of LC); 2) the use of laser methods to study the LC state of matter (nonlinear spectroscopy of LC). Specific aspects of optical harmonic generation effects, induced Raman scattering, and the self-action of powerful laser beams are discussed in detail. LC restructuring effects under the action of coherent radiation are described. The relation between the symmetry of the molecules forming the LC phase and the symmetry of macroscopic nonlinear susceptibilities is analyzed; a special role is reserved for the spatial dispersion of LC susceptibility, which has a bearing, in particular, on the possibility of generation of even optical harmonics and on the possibility of specific light self-action modes. Recent experiments on second-harmonic generation in nematic LC, on measurement of LC relaxation parameters in the pretransition range, and on the nonstationary self-focusing effect are described, as well as determination of higher elements of the orientation distribution function of LC molecules from induced-scattering characteristics.