Inorganic photoluminescence (PL) phosphors (including upconversion (UC), down‐shifting (DS), and persistent (PersL) materials) with tunable outputs, high quantum yields (QYs), and excellent photostability have attracted tremendous attention in advanced information hiding and encoding (IHE). The three kinds of phosphors endow security patterns in different IHE levels owing to their unique optical features. For security applications, it is very necessary to review how to boost optical performance and achieve multi‐level anti‐counterfeiting. Herein, diversely pivotal approaches on the achievement of multicolor emissions, high QYs, and excellent photostability are summarized. Full learning of these methods is promising to design superior inorganic phosphors. Based on the appealing optical properties of inorganic PL materials, a progressively improved IHE level is revealed by using unitary inorganic PL material, the couples of UCL, DS, and PersL, and further combinations together with external stimuli. This review not only deepens an understanding of designing high‐performance inorganic PL phosphors, but also gets inside into the construction of high‐performance IHE.