We present the synthesis of Er3+/ Yb3+ co-doped Gd2O3 nanospheres using the wet-chemical method followed by a synergistic step-by-step calcination process, a novel approach in the field. The nanospheres exhibited red color upconversion luminescence (UCL) after multi-step annealing at temperatures ranging from 650 °C to 1150 °C, achieving a fully spherical morphology. The diameter and surface morphology of the nanospheres were significantly altered by the annealing process, decreasing from 382.77 ± 1.72 nm with a smooth surface to 245.7 ± 1.31 nm with a rougher surface. The UCL intensity increased with the annealing temperature. The influence of Er3+/ Yb3+ co-doped Gd2O3 nanospheres, excited by a 975 nm laser, was investigated, and the decay time for UCL samples was analyzed. The luminescence peak at 1026 nm was attributed to the 4I11/2 (Er3+) + 2F7/2 (Yb3+) → 4I15/2 (Er3+) + 2F5/2 (Yb3+) transition/ or 2F5/2 → 2F7/2 of the Yb3+ ions within the Gd2O3 matrix. Furthermore, the UCL properties of Er3+/ Yb3+ co-doped Gd2O3 nanophosphors were explored to detect the NTERA-2 cancer cells. These findings suggest that the rare earth co-doped Gd2O3 nanospheres might hold significant potential for biomedicine and imaging diagnostics applications, sparking new interest and possibilities in these fields.