We have demonstrated nonlinear cross-phase modulation in electro-optic crystals using intense, single-cycle terahertz (THz) radiation. Individual THz pulses, generated by coherent transition radiation emitted by subpicosecond electron bunches, have peak energies of up to 100 microJ per pulse. The time-dependent electric field of the intense THz pulses induces cross-phase modulation in electro-optic crystals through the Pockels effect, leading to spectral shifting, broadening, and modulation of copropagating laser pulses. The observed THz-induced cross-phase modulation agrees well with a time-dependent phase-shift model.