Unlike two-dimensional heterostructures formed through van der Waals interactions, Sq-biphenylene is a two-dimensional carbon material composed of two biphenylene layers rotated by 90° relative to each other and connected through interlayer covalent bonds. In this work, first-principles calculations based on density functional theory are performed to systematically investigate the effects of biaxial strain ranging from −8% to 6% on the electronic structure, carrier transport characteristics, linear optical properties, and second-order nonlinear optical response of Sq-biphenylene. The electronic structures are calculated using VASP, the effective masses and Fermi velocities are analyzed using VASPKIT, and the linear and nonlinear optical properties are obtained using ABINIT with scissors corrections. The results reveal a pronounced and asymmetric strain dependence of the electronic properties. Compressive strain continuously reduces the direct band gap and drives Sq-biphenylene into a semimetallic state at −8%, whereas tensile strain induces a transition from a direct- to an indirect-band-gap semiconductor. The electronic states near the Fermi level are dominated by p orbitals, particularly the pz orbital, and no pronounced redistribution of orbital contributions is observed within the investigated strain range. The effective masses and Fermi velocities further demonstrate that biaxial strain can continuously tune the magnitude and anisotropy of carrier transport. The optical response is also strongly modulated by biaxial strain. The maximum absorption coefficient reaches approximately 2 × 10⁸ m^-1 under −6% compressive strain, while the linear optical response is significantly suppressed under 6% tensile strain. More importantly, the two inequivalent nonzero components of the second-order susceptibility exhibit distinctly different strain dependences. In particular, one component shows a strong low-energy response under −6% compressive strain, reaching an absolute value of approximately 710 pm/V, while the nonlinear response is strongly suppressed under 6% tensile strain. Decomposition of the second-harmonic-generation response into single- and two-photon interband and intraband contributions indicates that the enhanced nonlinear response is mainly associated with interband transitions, particularly the two-photon interband process. These results establish the correlation between strain-induced electronic-structure evolution and the resulting linear and nonlinear optical responses, demonstrating that biaxial strain engineering provides an effective strategy for simultaneously tuning the electronic, transport, and optical properties of Sq-biphenylene and highlighting its potential for flexible optoelectronic and strain-tunable nonlinear optical devices.