This paper presents energy transfer occurring in small organically modified core-shell nanoparticles (core lanthanide oxide, shell polysiloxane) (diameter < 10 nm) conjugated with photosensitizers designed for photodynamic therapy applications. These nanoparticles covalently encapsulate a photosensitizing PDT drug in different concentrations. Stable dispersions of the nanoparticles were prepared and the photophysical properties of the photosensitizers were studied and compared to those of the photosensitizers in solution. Increasing the photosensitizer concentration in the nanoparticles was not found to cause any changes in the absorption properties while fluorescence and singlet oxygen quantum yields decreased. As a possible explanation, we have suggested that both long distance energy transfer such as FRET and self-quenching could occur into the nanoparticles. A simple "trend" model of this kind of energy transfer complies with results of experiments on steady state fluorescence and singlet oxygen luminescence.