Nanotechnology is rapidly expanding into the biomedical field. At the Institute for Lasers, Photonics and Biophotonics, research in nanotechnology has focused on the development of surface functionalized nanoparticles for diagnostics and targetted therapy. This technology provides a platform for the development of new imaging, diagnostic and therapeutic modalities. For bioimaging and diagnostics, nanoparticles are fabricated containing rare-earth ions which exhibit two-photon, anti-stokes luminescence by frequency up-converting infrared to visible light. We have successfully prepared the phosphor containing nanoparticles having a size ∼25 nm with a silica shell around it which helps in aqueous dispersabilty, inhibits water quenching with nanophosphors and allows functionalization for covalent binding of bioprobes for targeting. The coupling of specific peptides, proteins or nucleic acid sequences to the silica shell will allow for the selective detection of biological entities and will have applications i...