We report the surface modification of nanocrystalline Gd2O3:Eu(3+) phosphor by (3-Aminopropyl)trimethoxysilane (APTMS). The nanoparticles were first coated with silica using the Stöber process, and then annealed at 650 °C for 2 h. Afterwards, APTMS was functionalized onto the silica layer to obtain Gd2O3:Eu(3+) nanoparticles bearing amine groups on the surface. The effect of silica coating, and the subsequent annealing process on the crystallization of the nanophosphor were analyzed by x-ray diffraction (XRD). High-resolution transmission electron microscopy (HR-TEM) confirmed the presence of a silica layer of ∼45 nm thickness. X-ray photoelectron (XPS) and Fourier transform infrared (FTIR) spectroscopy confirmed the presence of silica and the amine groups. Photoluminescence (PL) analysis demonstrated an increased emission after functionalization of nanoparticles. Absolute quantum yield (QY) measurements revealed an 18% enhancement in QY in functionalized nanoparticles compared with unmodified nanoparticles, which is of great importance for their biomedical applications.