The Stokes emission of nanocrystalline and bulk Y2O3:Er3+, Yb3+ following 488 nm were reported. Two nanocrystalline samples were studied, one produced via propellant synthesis and the other via wet synthesis. Green, red, and NIR emission from the Er3+ ion was observed in both bulk and nanocrystalline samples. Emission from the F-2(5/2) --> F-2(7/2) Yb3+ transition was also observed in the bulk and nanocrystalline samples following 488 nm excitation, thereby signifying the presence of an energy transfer process from Er3+ to Yb3+. The peaks attributed to Yb3+ emission were much less intense in the nanocrystalline material, indicating that the energy transfer process occurs less readily in this material because of the inherent high phonon energies from the adsorbed CO2 and H2O on their surface. Following excitation with 978 nm, green and red anti-Stokes luminescence was evidenced in the samples under investigation. An enhancement of the red emission is observed in both bulk and nanocrystalline samples, although to a much greater degree in nanocrystalline Y2O3:Er3+, Yb3+. The enhancement of the red emission was shown to occur due to an ion-pair process of the form: (F-4(7/2), I-4(11/2)) --> (F-4(9/2), F-4(9/2)), which directly populates the F-4(9/2) state. However, this process cannot account for the drastic difference in the magnitude of the red enhancement between bulk and nanocrystalline samples A phonon-assisted energy transfer process was found to be operative, which also populates the F-4(9/2) state. This process occurs more readily in the nanocrystalline material as the large vibrational quanta from the adsorbed carbonate and hydroxyl ions can easily bridge the mismatch in energy.