YF3:Er³⁺ nanoparticles (NPs) are characterized as possible intracellular nanoprobes for temperature measurements at the nanoscale. First, their spectral emission in the visible range is characterized and the excitation mechanism is studied through the observation of emitted intensity as a function of the excitation power. A slightly sub-linear excitation mechanism is observed. Then, their temperature-sensing ability in the typical biological temperature range is investigated by means of luminescence intensity ratio (LIR) measurements between two thermally coupled levels. We obtained a maximum relative sensitivity of 0.009 K^-1 at 24 °C with an uncertainty associated with the temperature measurements that ranges from 0.2 °C to 0.4 °C. The luminescence lifetime of the NPs embedded in various mounting media (air, agarose and ProLong) is measured from images acquired using a confocal time-gated microscope. Mean lifetimes observed are in agreement with the measured lifetime of this composition. Moreover, given the impact of the environment on the photophysical properties, we compared the measured lifetime of NPs embedded in different mounting media. The highest lifetime is measured when ProLong is used as a mounting medium, probably because of the hindered vibrational motion of water, which can act as a quencher molecule for NP luminescence. Luminescence lifetime in ProLong is ∼40% higher compared with the ones obtained in agarose and air, while lifetime in agarose is slightly higher than the one in air. NPs are then functionalized with poly (acrylic acid) (PAA) to improve both their water dispersibility and their uptake in cancer cells (HeLa). Cells are incubated with NPs and imaged by the time-gated confocal microscopy, which takes advantage of the long luminescence lifetimes of these NPs to temporally separate their emission from cellular autofluorescence. We demonstrated that PAA functionalization strongly improved cell internalization of the NPs and yielded smaller aggregates in solution with respect to non-functionalized NPs.