We have studied the mechanisms of water-based quenching of the upconversion photoluminescence of upconverting nanophosphors (UCNPs) via luminescence decay measurements for a better understanding of the non-radiative deactivation pathways responsible for the relatively low upconversion luminescence efficiency in aqueous solutions. This included both upconversion luminescence measurements and the direct excitation of emissive energy states of Er(3+) and Yb(3+) dopants in NaYF4:Yb(3+),Er(3+) UCNPs by measuring the decays at 550 and 655 nm upon 380 nm excitation and at 980 nm upon 930 nm excitation, respectively. The luminescence intensities and decays were measured from both bare and silanized NaYF4:Yb(3+),Er(3+) and NaYF4:Yb(3+),Tm(3+) UCNPs in H2O and D2O. The measurements revealed up to 99.9% quenching of the upconversion photoluminescence intensity of both Er(3+) and Tm(3+) doped bare nanophosphors by water. Instead of the multiphonon relaxation of excited energy levels of the activators, the main mechanism of quenching was found to be the multiphonon deactivation of the Yb(3+) sensitizer ion caused by OH-vibrations on the surface of the nanophosphor. Due to the nonlinear nature of upconversion, the quenching of Yb(3+) has a higher order effect on the upconversion emission intensity with the efficient Yb-Yb energy migration in the ∼35 nm nanocrystals making the whole nanophosphor volume susceptible to surface quenching effects. The study underlines the need of efficient surface passivation for the use of UCNPs as labels in bioanalytical applications performed in aqueous solutions.