Er3+‐activated NaSrLa(MoO4)O3 phosphors were synthesized by a traditional solid‐state reaction technique, which exhibited bright green emissions ascribing to the (2H11/2, 4S3/2) → 4I15/2 transitions of Er3+ ions under 377 nm excitation. The luminescence intensity increased with increasing the Er3+ ion concentration and achieved its maximum value when the doping concentration was 4 mol%. Moreover, the critical distance was estimated to be 25.32 Å, and the dipole‐dipole interaction played a significant role in NR energy transfer between Er3+ ions in NaSrLa(MoO4)O3 host lattices. At a forward bias current of 100 mA, the Light Emitting Diode (LED) device emitted a bright green emission with the color coordinate of (0.2547, 0.5996) that can be observed by the naked eye. Besides, based on the thermally coupled levels of 2H11/2 and 4S3/2, the temperature sensing performances of the prepared phosphors in the temperature range of 303‐483 K were studied using the fluorescence intensity ratio technique. The maximum sensor sensitivity was about 0.0150 K−1 when the temperature was 483 K, and the Er3+ ion concentration largely influenced the sensor sensitivity of studied samples. Furthermore, the prepared phosphors exhibited excellent water resistance and thermal stability behavior. These characteristics demonstrated that the Er3+ activated NaSrLa(MoO4)O3 phosphors were dual‐functional materials for solid‐state illumination and non‐contact temperature measurement.