Erbium-doped ZrO2 nanoparticles are prepared by a sol-emulsion-gel technique. The effects of the Er3+ concentration and different codopants (Yb3+ and y(3+)) in the ZrO2 matrix on the upconverted emission are reported. Green and red upconversion emission at 550 and 670 nm were observed from these oxide nanocrystals with 980 nm excitation. The overall intensity decreases with an increasing concentration of erbium in zirconia. The presence of codopants (Y3+ and Yb3+) also increases the overall intensity of the upconverted emission. The emission spectra and the pump intensity dependence of the luminescence intensities are used to understand the excitation mechanism. These results confirm that upconverted emission in these materials is due to a two-photon excited-state absorption (ESA)/energy transfer upconversion (ETU) process.