We examine coherent phonons in a strongly driven sample of optimally-doped high temperature superconductor YBa$_2$Cu$_3$O$_{7-delta}$. We observe a non-linear lattice response of the 4.5,THz copper-oxygen vibrational mode at high excitation densities, evidenced by the observation of the phonon third harmonic and indicating the mode is strongly anharmonic. In addition, we observe how high-amplitude phonon vibrations modify the position of the electronic charge transfer resonance. Both of these results have important implications for possible phonon-driven non-equilibrium superconductivity.