Lanthanide-doped nanoparticles, featuring sharp emission peaks with narrow bandwidth, exhibit high downconversion luminescence intensity, making them highly valuable in the fields of bioimaging and drug delivery. High-crystallinity Y2O3 nanoparticles (NPs) doped with Er3+ ions were functionalized by using a pegylation procedure to confer water solubility and biocompatibility. The NPs were thoroughly characterized using transmission electron microscopy (TEM), inductively coupled plasma mass spectrometry (ICP-MS), and photoluminescence measurements. The pegylated nanoparticles were studied both from a toxicological perspective and to demonstrate their internalization within HCT-116 cancer cells. Cell viability tests allowed for the identification of the “optimal” concentration, which yields a detectable fluorescence signal without being toxic to the cells. The internalization process was investigated …