Methylmercury (MeHg+) is a strong liposoluble ion, which can be accumulated in the organs of animals and can cause prenatal nervous system and visceral damage. Therefore, the efficient and sensitive monitoring of MeHg+ in organisms is of great importance. Upconversion luminescence (UCL) detection based on rare-earth upconversion nanophosphors (UCNPs) as probes has been proved to exhibit a large anti-Stokes shift, no autofluorescence from biological samples, a remarkably deep penetration depth, and no photobleaching. In this study, a hydrophobic heptamethine cyanine dye (hCy7) modified by two long alkyl moieties and amphiphilic polymer (P-PEG)-modified nanophosphors (hCy7-UCNPs) was fabricated as a highly sensitive water-soluble probe for UCL monitoring and bioimaging of MeHg+. Further application of hCy7-UCNPs for sensing MeHg+ was confirmed by an optical titration experiment and upconversion luminescence live cell imaging. Using the ratiometric upconversion luminescence as a detection signal, which provides a built-in correction for environmental effects, the detection limit of MeHg+ for this nanosystem was as low as 0.18 ppb. Importantly, the hCy7-UCNPs nanosystem was shown to be capable of monitoring MeHg+ ex vivo and in vivo by upconversion luminescence bioimaging.