There is increasing interest in rare earth (RE) doped nanoparticles (NPs) due to their sharp absorption and photoluminescence (PL) in the near infrared (NIR) spectral region. These NIR based nanoparticles (NPs) could allow biological imaging at substantial depths with enhanced contrast and high spatial resolution due to the absence of auto fluorescence in biological samples under infrared excitation. Here, we present the highly efficient infrared photoluminescence in GdF₃:Nd(3+) nanoparticles under 800 nm excitation within the hydrodynamic size limitations for bio-applications. The downconversion (Stokes emission) absolute quantum yields (QY) in powder, polymaleic anhydride-alt-1-octadicene (PMAO) coated powder and colloidal solutions have been investigated. QY measurements have revealed that downconversion (Stokes emission) QYs of approximately 5 ± 2 nm sized GdF₃:1% Nd(3+) colloidal NPs are 2000 times higher than those of efficient upconversion (UC) particles NaYF₄:20% Er/2% Yb of the same size. Furthermore, the utility of these NIR emitting nanoparticles for bioimaging probes has been demonstrated by confocal imaging and spectroscopic study.