Y 2 O 3 :Er,Yb upconversion nanoparticles were prepared by laser ablation in liquid and capped with poly(ethylene glycol) (PEG). A Nd:YAG green laser with nanosecond pulse duration was used. Capping was carried out by a two-step process. The first step is surface modification using a silane coupling agent, (3-aminopropyl)triethoxysilane (APTES), to aminate the surface of nanoparticles. The second step was the conjugation of PEG chains to the surface by amido binding reaction between the surface amino groups and activated esters connected to PEG. The prepared upconversion nanoparticles were highly crystalline polycrystals, the particle size of which was approximately 20 nm. Dopants in phosphor nanoparticles were not removed by laser irradiation. The spectra of PEG-capped nanoparticles were almost the same as those of uncapped nanoparticles. The capped nanoparticles would be useful for biomedical applications.