We consider a possibility to create a metamaterial with nonlinear magnetic response in the microwave frequency range. Such a metamaterial is a regular periodic three-dimensional-array of resonant conductive elements with diodes as nonlinear insertions. We calculate the arising quadratic nonlinear susceptibility and show how it is controlled by the properties and arrangement of the structure elements as well as by the type and characteristics of the diode. We discuss the requirements for the diode necessary to optimize the nonlinear response of the proposed metamaterial.