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Abstract Structural disorder has been shown to enhance and modulate magnetic, electrical, dipolar, electrochemical, and mechanical properties of materials. However, the possibility of obtaining novel optical and optoelectronic properties from structural disorder remains an open question. Here, we show unambiguous evidence of disorder — in the form of anisotropic, picoscale atomic displacements — modulating the refractive index tensor and resulting in the giant optical anisotropy observed in BaTiS₃, a quasi‐one‐dimensional hexagonal chalcogenide. Single crystal X‐ray diffraction studies reveal the presence of antipolar displacements of Ti atoms within adjacent TiS₆chains along thec‐axis, and three‐fold degenerate Ti displacements in thea‐bplane.^47/49Ti solid‐state NMR provides additional evidence for those Ti displacements in the form of a three‐horned NMR lineshape resulting from a low symmetry local environment around Ti atoms. We used scanning transmission electron microscopy to directly observe the globally disordered Tia‐bplane displacements and find them to be ordered locally over a few unit cells. First‐principles calculations show that the Tia‐bplane displacements selectively reduce the refractive index along theab‐plane, while having minimal impact on the refractive index along the chain direction, thus resulting in a giant enhancement in the optical anisotropy. By showing a strong connection between structural disorder with picoscale displacements and the optical response in BaTiS₃, this study opens a pathway for designing optical materials with high refractive index and functionalities such as large optical anisotropy and nonlinearity. This article is protected by copyright. All rights reserved