Our group has synthesized Gd2O3:Yb3+/Er3+ nanocomposites as magnetic/fluorescence imaging successfully in the previous study, which exhibit good uniformity and monodispersibility with a mean size of 7.4 nm. However, their systematic risk assessment remains unknown. In this article, the in vitro biocompatibility of the Gd2O3:Yb3+/Er3+ was assessed on the basis of cell viability and apoptosis. In vivo immunotoxicity was evaluated by monitoring the product of reactive oxygen species (ROS), clusters of differentiation (CD) markers, and superoxide dismutase (SOD) in Balb/c mice. No significant differences were found in cell viability, apoptosis, and immunotoxicity between our imaging Gd2O3:Yb3+/Er3+ and gadodiamide which are used commonly in clinical. Few nanoprobes were localized in the phagosomes of the liver, heart, lung, spleen, kidney, brain, and tumor under the transmission electron microscopy (TEM) images. In addition, our products reveal good T-1-weighted contrast enhancement of xenografted murine tumor. Therefore, the above results may contribute to the effective application of Gd2O3:Yb3+/Er3+ as molecular imaging contrast agents and dual-modal nanoprobes for cancer detection.