Y 2 O 3 :Er 3+ ultrafine phosphors with a varying Yb 3+ ion concentration were prepared by a urea homogeneous precipitation method. The results of XRD show that all the samples are of a pure cubic structure and the average crystallite sizes can be calculated as 45, 34, and 28 nm for Y 2 O 3 :Er 3+ ultrafine phosphors with Yb 3+ ion concentrations of 0, 10%, and 20%, respectively. The lattice constant and cell volume of the ultrafine phosphors decrease with enhancing Yb 3+ ion concentration. The upconversion luminescence spectra of all the samples were studied under 980 nm laser excitation. The strong green and red upconversion emission were observed, and attributed to the 2 H 11/2 → 4 I 15/2 , 4 S 3/2 → 4 I 15/2 and 4 F 9/2 → 4 I 15/2 transitions of Er 3+ , respectively. The intensity of red emission increases with increasing Yb 3+ ion concentration. The effect of Yb 3+ ion concentration on the structures and upconversion luminescence mechanism were discussed.