The Gd2O3:Er3+/Gd2O3:Yb3+ core-shell nanorods (NRs) as well as Er3+ and Yb3+ homogeneously codoped Gd2O3 NRs were synthesized by the hydrothermal method. The average diameters of the NRs are approximately 20 nm and the lengths are 150-200 nm. The thickness of the Gd2O3:Yb3+ shells on the Gd2O3:Er3+ cores are approximately 5 nm. The upconversion luminescence (UCL) properties of the core-shell NRs have been studied in contrast to homogeneously codoped NRs under 978-nm laser diode excitation. Green emissions of 2H11/2, 4S3/2-4I15/2, and red emissions of 4F9/2-4I15/2 were observed. Relative intensity of the red (4F9/2-4I15/2) to the green (4S3/2/2H11/2-4I15/2) and the intensity ratio (RHS) of 2H11/2-4I15/2 to 2H11/2-4I15/2 decrease obviously in the core-shell NRs compared to the NRs. The power-dependence of UCL intensity and the thermal effect caused by 978-nm diode laser irradiation was studied. The result indicates that the cross-relaxation effect and the thermal effect in the core-shell structure is effectively depressed.