The NaLa(MoO4)2:Yb3+/Er3+ phosphor is synthesized through hydrothermal method with the further calcinations. The intense green upconversion (UC) emission is observed when it is excited by 980 nm pump power. Then we investigate the mechanism of UC emission based on the power dependent upconversion luminescence (UCL) spectra. Temperature sensing performance based on the Stark levels (2H11/2/4S3/2) of Er3+ is estimated through investigating temperature-dependent UCL spectra from 298 K to 573 K. And the maximum value of sensor sensitivity based on FIR is approximately 0.00474 K−1. Moreover, the variations of UCL intensities from 2H11/2/4S3/2 → 4I15/2 transitions have been monitored with increasing pump power, which suggests that the pump energy can be absorbed by sample and heat it. In addition, the internal temperature of materials can be estimated by FIR technique. All the experimental results indicate that the phosphor has good potential in optical temperature sensing and optical heating.