We describe the synthesis and properties of functional microgel particles based on poly(N-vinylcaprolactam-co-glycidyl methacrylate) (PVCL/PGMA) copolymer. A series of colloidally stable microgel particles with a range of glycidyl methacrylate content were prepared by surfactant-free heterophase polymerization in water. The microgel particles obtained had hydrodynamic radii between 250 and 350 nm and were fairly monodisperse in size; however, a broadening of the particle size distribution was observed for samples with a low GMA content. The PVCL/PGMA microgel particles exhibit thermally responsive reversible changes in diameter in water, and the swelling degree increased with the PVCL fraction in the copolymer structure. These microgels were then modified with photoluminescent europium-doped lanthanum fluoride nanoparticles (LaF3:Eu-AEP) through reaction of the 2-aminoethyl phosphate surface ligands with epoxy groups present in the microgel. These hybrid microgels were colloidally stable and thermally responsive in aqueous solution.