Multifunctional beta-NaGdF4:Yb3+/Er3+ nanoparticles (NPs) were successfully synthesized using oleylamine as both solvent and stabilizer via the thermolysis method. They have uniform morphology with a mean size of 12.7 nm and show efficient up-conversion emission when excited by a 980 nm laser. The up-conversion NPs demonstrated a nearly quadratic dependence of the photoluminescence intensity on the excitation power, which indicated a two-photon induced process. In addition, these NPs exhibit paramagnetic characteristics at both 300 and 77 K. The magnetic properties of beta-NaGdF4:Yb3+/Er3+ NPs are intrinsic to the Gd3+ ions. The measured mass magnetic susceptibility value of 0.79 x 10(-4) em mu/g x Oe at room temperature is close to reported values of other NPs for bioseparation and optical-magnetic dual modal nanoprobes in biomedical imaging.