Magnetoinduced effects in second harmonic (SH) generation are experimentally studied in the CoxCu1-x granular films. Significant nonlinear magneto-optical Kerr effect (NOMOKE) is observed both in longitudinal and transverse configurations. The interference of the SH fields generated by the interface and bulk, nonmagnetic and magnetoinduced nonlinear polarizations is discussed as a mechanism of NOMOKE enhancement. The bulk nonmagnetic dipole quadratic susceptibility of Co nanocrystals stems from the lack of inversion symmetry in the Co granules. © 1998 American Institute of Physics.