The synthesis by thermal decomposition of rare earth doped yttrium oxide nanoparticles was investigated. The elements of the rare earth were europium, which showed strong fluorescence, and erbium, which indicated upconversion properties. Metal-oleate complex was used as a precursor. The results of Scherrer’s equation and SEM indicated that nanoparticles were successfully synthesized. Appropriate thermal decomposition time increased fluorescence intensity of europium activators by completion of thermal decomposition of oleic acid, while too long thermal decomposition time decreased the fluorescent intensity. Fluorescence of erbium activator was observed after annealing, while it was not observed before annealing because of stronger fluorescence of oleylamine.