Synthesis, and luminescence properties of Er3+ in an Er2Te4O11 nanocrystals dispersed tellurite glass under direct and upconversion excitation are reported. The nanocrystals which could be grown by ageing or subjecting the glass to stress, were grown, in this case, by ageing and were characterized by X-ray, FESEM and TEM studies. The growth of nanocrystals in the matrix significantly enhances both the normal and upconversion luminescence efficiency of the glass. The reason of such enhancement of efficiency is explained and the photo-physics involved in the upconversion luminescence process has been proposed. High upconversion luminescence efficiency of the glass shows the prospect of its use as solar IR concentrator and NIR sensor. (C) 2009 Elsevier B.V. All rights reserved.