Engineering effective electronic parameters is a major focus in condensed matter physics. Their dynamical modulation opens the possibility of creating and controlling physical properties in systems driven out of equilibrium. In this Letter, we demonstrate that the Hubbard U, the widely used on-site Coulomb repulsion in strongly correlated materials, can be modified on femtosecond timescales by a strong nonresonant laser pulse excitation in the prototypical charge-transfer insulator NiO. Using our recently developed time-dependent density-functional theory plus self-consistent U method, we demonstrate the importance of a dynamically modulated U in the description of the high-harmonic generation of NiO. Our study opens the door to novel ways of modifying effective interactions in strongly correlated materials via laser driving, which may lead to new control paradigms for field-induced phase transitions and perhaps laser-induced Mott insulation in charge-transfer materials.