Upconversion nanoparticles (UCNPs) are highly efficient luminescent nanomaterials with emission in the visible spectra while being excited by near-infrared region light (NIR). With their unique properties such as high luminescence intensity, sharp emission peaks with narrow bandwidth, large anti-Stokes’ shift, and sizes smaller than 100 nm, UCNPs have emerged as promising candidates for diverse biomedical applications such as cancer detection and therapy, fluorescence imaging, magnetic resonance imaging (MRI), and drug delivery. The UCNPs are composed of a crystalline matrix doped with lanthanide ions that can absorb NIR light (~980 nm) and upconvert it to visible light. However, to achieve successful biomedical applications, proper functionalization, target-specific cell interaction, and biocompatibility are critical factors that must be considered. Additionally, a comprehensive nanotoxicological assessment is necessary to ensure that UCNPs are not cytotoxic or genotoxic. This assessment is particularly important for long-term studies of nanoparticles’ tracking in vivo. Therefore, this chapter aims to provide an in-depth evaluation of the nanotoxicological issues related to nanoparticles (NPs) and UCNPs in biomedical applications, and ensure their safety and efficacy as bioimaging and chemotherapeutic delivery tools.