The excitation mechanisms of rare-earth dopants in III-V semiconductors are being reviewed. The discussion is focused on ytterbium-doped InP crystals for which a particularly large amount of experimental data has been gathered. Here, the results obtained recently by optically detected microwave-induced impact ionization are being examined in detail. On the basis of the experimental findings it is argued that the intrashell luminescence is excited by an intermediate state involving binding of an exciton. Direct evidence for the existence of such a state, of pseudoacceptor type, will be given. The nonradiative recombination channel responsible for the fast decay of Yb luminescence will also be discussed and, for the first time, evidence for an Auger process will be presented. It will also be shown that the nonradiative channel may be effectively blocked by impact ionization of a participating carrier.