Fluorescent nanoparticles used in biomedical applications should be stable in their colloidal form in aqueous media and possess a high quantum yield (QY). We report ultrasmall Ln2O3 (Ln = Eu, Tb, or Dy) nanoparticle colloids with high QYs in aqueous media. The nanoparticles are grafted with hydrophilic and biocompatible poly(acrylic acid) (PAA) to ensure colloidal stability and biocompatibility and with organic photosensitizer 2,6-pyridinedicarboxylic acid (PDA) for achieving a high QY. The PAA/PDA-Ln2O3 nanoparticle colloids were nearly monodispersed and ultrasmall (particle diameter: ∼2 nm). They exhibited excellent colloidal stability with no precipitation after synthesis (>1.5 years) in aqueous media, very low cellular toxicity, and very high absolute QYs of 87.6, 73.6, and 2.8% for Ln = Eu, Tb, and Dy, respectively. These QYs are the highest reported so far for lanthanides in aqueous media. Therefore, the results suggest their high potential as sensitive optical or imaging probes in biomedical applications.