Upconversion nanoparticles (UCNPs), as near‐infrared (NIR) absorbers, are promising materials for use in flexible NIR photodetectors, which can be applied for wearable healthcare applications due to their advantages in a broad spectral range, high photostability, and biocompatibility. However, to apply UCNPs in wearable and large‐area integrated devices, water stability and micro‐patterning methods are required. In this work, the UCNPs are encapsulated with a siloxane polymer (UCNP@SiOx) via a sol–gel process to enable photo‐patternability and photo‐stabililty in water conditions. The UCNP@SiOx can be photo‐patterned down to micron‐scale feature sizes and exhibit no significant decrease in upconversion photoluminescence (PL) intensities and PL decay time after immersion in water for 2 h. Moreover, UCNP@SiOx is evaluated by an in vitro biocompatibility test and found to be non‐toxic. By integrating the UCNP@SiOx with MoS2 phototransistors (MoS2 + UCNP@SiOx), the devices exhibit enhanced responsivity (0.79 A W−1) and specific detectivity (2.22 × 107 Jones), which are 2.8 times higher than in the bare MoS2 phototransistors, and excellent mechanical durability over 1000 cycles of 20% compression and re‐stretch test. This work opens the way for the facile synthesis of water‐stable and photo‐patternable siloxane‐encapsulated UCNPs and a strategy for fabricating high‐performance flexible NIR phototransistors through wavelength conversion.