Rare-earth-doped gadolinium fluoride nanocrystals were synthesized by a single step synthesis employing ethylene glycol as solvent. Based on X-ray diffraction studies, stabilization of hexagonal modification of GdF3 has been inferred. The microscopic studies show formation of uniformly distributed nanocrystals (similar to 15 nm). The nanoparticles are readily dispersible in water and show bright luminescence in colloidal solution. The luminescence properties have been investigated as a function of activator concentrations, and enhanced optical properties have been attributed to efficient energy transfer from the Gd3+ to the activator RE3+ ions, which has further been confirmed by steady-state and time-resolved optical studies. It has been demonstrated that on doping appropriate amount of activators in host GdF3, a novel white-light-emitting phosphor is obtained with CIE co-ordinates and correlated color temperature (CCT) very close to broad daylight. This can have promising applications as phosphor for white-light ultraviolet-light-emitting diodes (UV-LEDs). Our experiments showed efficient labeling of human breast carcinoma cells (MCF-7) by Tb3+-doped GdF3 nanoparticles. The fluorescence intensity was found to be dependent on the surface modifying/coating agent, and the results were validated using confocal microscopy in terms of localization of these functionalized nanoparticles. (C) 2011 Elsevier Inc. All rights reserved.