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Simultaneous integration of photon emission and biocompatibility into nanoparticles is an interesting strategy to develop applications of advanced optical materials. In this work, we present the synthesis of biocompatible optical nanocomposites from the combination of near-infrared luminescent lanthanide nanoparticles and water-soluble chitosan. NaYF 4 :Yb,Er upconverting nanocrystal guests and water-soluble chitosan hosts are prepared and integrated together into biofunctional optical composites. The control of aqueous dissolution, gelation, assembly, and drying of NaYF 4 :Yb,Er nanocolloids and chitosan liquids allowed us to design novel optical structures of spongelike aerogels and beadlike microspheres. Well-defined shape and near-infrared response lead upconverting nanocrystals to serve as photon converters to couple with plasmonic gold (Au) nanoparticles. Biocompatible chitosan-stabilized Au/NaYF 4 :Yb,Er nanocomposites are prepared to show their potential use in biomedicine as we find them exhibiting a half-maximal effective concentration (EC 50 ) of 0.58 mg mL -1 for chitosan-stabilized Au/NaYF 4 :Yb,Er nanorods versus 0.24 mg mL -1 for chitosan-stabilized NaYF 4 :Yb,Er after 24 h. As a result of their low cytotoxicity and upconverting response, these novel materials hold promise to be interesting for biomedicine, analytical sensing, and other applications., Competing Interests: The authors declare no competing financial interest.