A fiber-taper-microsphere-coupled system was used to research the characteristics of laser oscillation and upconversion luminescence of Yb3+:Er3+ co-doped phosphosilicate (YECP) microspheres. The YECP microspheres were fabricated by melting the end of phosphosilicate filaments. Single- and multimode laser oscillation at 1535-1565 nm within the C-band were obtained. In addition, the output power of the single-mode laser at 1545.5 nm can be as high as 48.98 μW, which was achieved under pump power of 9.63 mW, and the side-mode suppression ratio was 51.49 dB. Upconversion fluorescence of Er3+ at 521, 532, and 544 nm also were measured, and the pump power dependence was studied. The fluorescence intensity was lower than that of Yb3+:Er3+ co-doped silica and oxyfluoride glass ceramic microspheres. Moreover, the physical mechanism of upconversion suppression and laser oscillation enhancement observed in our experiment was presented, which is beneficial to the preparation of rare-earth-doped microcavity lasers.