Ultrasonic nonlinearity measurements have been suggested as an effective tool for the early detection of fatigue damage in metallic structures. However, the correlation between ultrasonic nonlinearity and material damage induced by fatigue or plastic deformation has been observed to be non-monotonic by several researchers including by our group. To clarify the correlation between microstructure and ultrasonic nonlinearity, the nonlinear ultrasonic behavior of polycrystalline copper is observed at multiple stages of monotonic loading; while under tension, at the loaded peak, while unloading, and after loading. The microstructures corresponding to changes in nonlinearity are examined using hardness testing and transmission electron microscopy. In this system, ultrasonic nonlinearity does not monotonically increase with increased strain and dislocation density. Models that explain drops in nonlinearity are suggested, and destructive testing is used to support findings.